The emerging homecare market in Greece: A prospective economic model for the development of a reimbursement policy by insurance funds

Received (in revised form): 15th September, 2003

Georgios Labiris
is the Managing Director for Intermedico Network. He has over 10 years experience in the pharmaceutical/healthcare industry. His areas of expertise are: pharmaceutical marketing and business development, reimbursement policies for insurance funds, contemporary healthcare management. He has a MD (Medical School, Semmelweis University), a PhD (Medical School, Ioannina University) and a MSc (Business School, California C. University). In 2003 he joined Bioaxis SA (a biotechnology company) as the Business Development Director to direct all business development projects.

Dimitrios Dogramatzis
is the Managing Director and CEO of Bioaxis SA. He has over 10 years experience in the pharmaceutical industry. He is the former Regional Vice President (Northern Europe) of Serono International. He also has a BS pharmacy (School of Pharmacy, University of Patras) and a PhD (Medical School, University of Texas). He is the author of the book Pharmaceutical Marketing: A practical guide, HIS Health, 2002.

Keywords

Greece, homecare, licensed nursing services, NHS, reimbursement policy

Abstract The Greek National Health Service (NHS) has initiated a process of moving away from institutionalised care and promoting open care within the community, as a cost-containment measure. Despite the Greek governments commitment to provide nancial support, permitting families to carry the burden of homecare, the lack of legislation and appropriate accreditation procedures are still the main barriers for the provision of homecare in Greece. The emerging Greek homecare market suers from a lack of coordination of the eorts of paramedical professionals and the poor training of providers. In this paper, the basic prerequisites for the development of a nationwide homecare programme (integrated knowledge of the market (homecare), clear strategy, good collaboration among dierent providers, internal quality controls and a strict accreditation policy) are discussed. Furthermore, a prospective capitation model for the homecare services, adapted to Greek market data, is suggested as the basis of a realistic reimbursement policy by insurance funds.

HOMECARE DEFINED
Homecare may be dened as the range of services provided to a person in his/her own home in order to enable him/her to continue as actively and as independently as possible. Homecare is dierentiated from social care (the practical and emotional support) and healthcare (healthrelated activities). Social care is usually

Georgios Labiris Intermedico Network, 11143, Athens, Greece Tel:+302 1025 13868 e-mail: labiris@usa.net

provided by family members, friends, volunteers and social workers, both trained and untrained. Healthcare services are usually provided by trained people under the supervision of professional health workers such as physicians, nurses or licensed providers. Homecare is provided either through a consumer-directed (CD) or a professional management (PM)

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model of service nancing and delivery.1,2 The dening characteristic of a CD model of service delivery is that it allows the patient considerable choice and control over how supportive services are provided and by whom. In fact, CD models allow public programme clients to have an employer/employee relationship with their individual service providers, who are referred to by a variety of dierent terms: homecare workers, in-home aides, personal assistants, personal care attendants. There are virtually no restrictions with regard to clients hiring decisions. In contrast, the PM model requires that the providers are employed by organisations, typically home-health or homecare agencies, whose characteristics and structure are dened and regulated by licensing or other laws and by contractual agreements by public or private nancing programmes.3 Homecare agencies assume responsibility for and authority over hiring and managing front-line care providers. Public programmes often reimburse agencies at negotiated rates, which include a percentage for the agency overhead, in addition to the direct costs of the service.

common currency and entered the European Single Economic Arena. However, due to tight scal and monetary constraints, the government is striving to balance its commitment to welfare programmes (including homecare) with the need to maintain a sucient rate of economic growth, military modernisation and employment generation programmes.7 The Greek NHS can be characterised as a mixed system with elements both of the Bismarck model and the Beveridge model. Health services are primarily provided by NHS units, health units belonging to Insurance Funds and the private sector.

INSURANCE FUNDS IN GREECE

Healthcare services in Greece are funded through health insurance funds, thanks to the contributions paid by employers, employees and pensioners and the subsidy granted by the State. By international comparisons, health expenditure in Greece is high, reaching 9.1 per cent of the GDP (2000 data/OECD report). About 30 insurance funds provide coverage to almost the entire Greek population. The majority of the funds operate various insurance schemes providing health insurance in addition to pension, welfare and other benets. Membership of the funds is compulsory for all of the working population and their dependants and is based on occupation.8 Private funding is about 42 per cent of the total healthcare spending and includes direct out-of-pocket payments, as well as co-payments for services partly covered by insurance funds.

THE GREEK NHS

The Greek National Health System (NHS) was established in 1983 following the election of the new socialist government. The core principle of the Greek NHS was that healthcare was to be provided mainly in state-owned institutions.4 Despite the signicantly increased healthcare spending from 3.8 per cent of the gross domestic product (GDP) in 1980 to 5.2 per cent in 2000,5 according to Eurobarometer, Greece has one of the highest levels of public dissatisfaction with the NHS in the European Union (EU).6 Greece has succeeded in reducing budget decits and ination, two key factors that allowed the country to join the Economic and Monetary Union on January 2001. Along with 11 EU partners it adopted the

HOMECARE MARKET IN GREECE

The reform of social and welfare services in Greece began in 1998, aimed at the unication of existing fragmented welfare services among various public welfare organisations. The European trend towards deinstitutionalisation and open care within

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the community has also been adopted in Greece. Various policies have been developed in planning the care needs, mainly, of the ageing population. Among the state-nanced programmes were: (1) Open-care centres for the elderly (KAPI). KAPI are state-nanced programmes aiming to provide psychological support and health education and prevention activities to older people, thus improving their wellbeing, while they continue to live in their own personal environment; (2) summer camping programmes (in close collaboration with KAPI); (3) daily care centres for the elderly; and (4) home help for the elderly programme, which has been a very popular initiative of the Greek Ministry of Health and Welfare in collaboration with local municipal authorities. The aim of this programme is to provide homecare to the frail and lonely elderly in order to improve their quality of life, to maintain their autonomy and independence and keep them active in their social and family environment. Generally, the social and welfare services in Greece have developed in line with developments within Greek society and economy, meeting the needs of socially deprived population groups. However, the strong family relations, which traditionally oered a signicant lay social-support system, are in transition, following the decline of extended families in postindustrialised societies. Due to the Westernisation of Greek society, the welfare state is called upon to play a greater role in safeguarding social cohesion and quality of life, especially in the older and the underserved populations. Despite the Greek governments commitment to support the abovementioned programmes, their mandate to provide homecare by strengthening family policies and enabling the family to endure the burden for that care,9 the European Senior observatory and inventory explicitly noted the lack of legislation/

regulations as the main barrier for the provision of homecare in Greece.10 Lack of legislation resulted in a non-reimbursement policy from state insurance funds, discouraging private investors. Despite the turbulence in the Greek homecare market, some of the local private insurance funds, subsidiaries of multinational pharmaceutical companies and private nursing institutes, funded elementary homecare agencies for supporting their rudimentary managedcare, disease management and communitycare programmes, respectively. However, these eorts were segmented, lacking prospective strategy, quality and performance audit of the provided services. Furthermore, inexperienced senior management and lack of coordination between the provider groups resulted in overbalanced budgets and poor services to the client (patient). These restrains forced the parties involved to consider outsourcing the homecare services. Despite the major changes in the ownership structure of the Western homecare industry, homecare in Greece is still provided mainly by the uncoordinated eorts of visiting nurses associations or individual providers. The latter are mainly paraprofessionals that provide the services such as: homemaking, attendance, day care assistance, personal care assistance and community aide. The majority of disease management, managed care and community care programmes however, rely heavily on the countrywide multidisciplinary networks of nurse specialists11 and licensed homecare providers. According to International Standards, the potential homecare agency accredited to in-source homecare services by insurance funds should have the following prerequisites: (1) a countrywide network of multidisciplinary licensed healthcare providers; (2) a sophisticated quality and performance audit system of the provided

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services; (3) an experienced managerial team with a solid educational background for providing the strategy and ensuring the smooth collaboration among the dierent groups of healthcare providers; and (4) an integrated knowledge of the local healthcare market (ie Greece). Homecare should be a fundamental element of an integrated nationwide caremanagement policy. The premise in caremanagement is that increased investment will result in decreases in utilisation of expensive medical services (ie doctor visits and in-patient hospital stays). The concept of care-management includes ve critical components that comprise a typology: (1) Identication of the population in need for care. (2) Assessing the intensity of care needed. (3) Finding and contracting people in need of care. (4) Designing and implementing a programme that improves outcomes. (5) Measuring those outcomes.

INTRODUCING A CAPITATION REIMBURSEMENT MODEL FOR LICENSED-NURSING HOMECARE SERVICES

Insurance funds favour capitation models for outsourcing agreements regarding their healthcare plans. Capitation is an extreme form of risk sharing. It is a form of payment, which is made to the provider (ie homecare agency) on a per member per month (PMPM) basis. Capitation payments are generally made at the beginning of the month and they precede the provision of service to the members. PMPM rates are determined by estimating the cost of providing care to the given population, then adding a prot factor to the calculation. Capitation estimates are generally calculated for a period of one year, because it is dicult to make predictions beyond this period of time. The elementary step for the development of a prospective reimbursement model for licensed nursing

services is to categorise them according to their cost. The Greek NHS has been reluctant to evaluate the ocial cost of nursing services. In order to estimate the market price of nursing praxes, more than 1000 licensed healthcare providers were interviewed and six managed care organisations (MCOs) were consulted (see Table 1). Following the evaluation of the cost of licensed nursing praxes is the assessment of the prospective utilisation of services with the enrolee population. This is a dicult process since only past and current utilisation from unocial sources is available and often this data is sketchy. It is an absolute necessity however, for the determination of the average cost of licensed nursing praxis (see Table 2). Since capitation payments are made to the provider regardless of the amount of services provided to the enrolee population, the homecare agencies provide deductions that are proportional either to the number of the enrolees or the prospective number of praxes. The determination of the average cost per praxis and the prospective utilisation of services provide the necessary data for the evaluation of capitation rate on a specic enrolee population (see Table 3). The introduction of services in an emerging market with limited or no utilisation information available contains great risk for the provider that could be reduced by negotiating guaranteed rates or variable rates with the gatekeeper (MCO). Guarantees force the MCO to control the overall cost of the service. Respectively, expensive and/or risky diagnoses (eg provision of services to an HIV-infected patient) are excluded from the capitation rate and become curve outs from which a specic variable capitation rate is calculated.

DISCUSSION
The Greek NHS is promoting deinstitutionalisation and open care within

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Table 1: Cost of licensed nurse praxes Licensed nursing praxes Daily 08.0022.00 Phlebotomy (ca. 5 min) Minor nursing praxes (25 min) Average nursing praxes (50 min) Major nursing praxes (100 min) 15 29 44 59 Cost of praxes in Euros Daily 22.0008.00 Sat/Sun 08.0022.00 Sat/Sun 22.0008.00 19 36 55 74 26 51 77 103 30 58 88 118

1. Phlebotomy group also includes: Subcutaneous and subdermal injections. 2. Minor praxes group refers to Nursing care of trauma, glucose monitoring and insulin administration, removal of bronchial secretions, oxygen administration, etc IV administration of drugs, integrated support of chronic patients, enteral nutrition support, therapeutic bath, integrated personal hygiene, Levain catheterisation, integrated care of colostomy, integrated care of tracheostomy, etc. Introduction of a disease management programme, integrated care in a multitrauma patient, integrated care of burns, etc.

3. Average praxes group refers to

4. Major praxes group refers to

Table 2: Prospective utilisation of services Phlebotomy group Minor praxes group Average praxes group Major praxes group TOTAL Average cost of licensed praxis =) (C 25% 30% 40% 5% 100% 29

the community as a cost-containment intervention. Research suggests that the main benets of homecare are: (1) homecare fosters a one-to-one relationship between patients and family members in the independence and privacy of their home; (2) a home environment allows patients to be surrounded by friends and family; (3) the cost of homecare is substantially less than hospital stays; and
Table 3: Determination of capitation rates Enrollees Prospective (%) of Mean annual enrollees that praxes per utilise the service member that utilise the service 10 10 10 10 10 10 10 10 10 10 1 3 1 3 1 3 1 3 1 3 Total number of praxes per year

(4) the complications of institutionalisation are avoided (such as infections, depression, etc.). Hospital restructuring, improvements in technology and coordination in the provision of intrahospital care have resulted in shorter hospital stays, more out-patient treatment (care) and a growing emphasis on providing homecare. Longterm experience in home based models of care provision is limited however and some health systems (including the Greek NHS) were unable to support nationwide homecare programmes. According to Statistics Canadas 1996 General Social Survey on social and community support, 15 per cent of the employed women and 10 per cent of the total employed already

Deductions (%)

PMPY =) (C

PMPM =) (C

20,000 20,000 40,000 40,000 60,000 60,000 80,000 80,000 100,000 100,000

2,000 6,000 4,000 12,000 6,000 18,000 8,000 24,000 10,000 30,000

10 20 15 35 20 40 25 40 30 40

2.6 7 2.5 5.7 2.3 5.2 2.2 5.2 2 5.2

0.217 0.583 0.208 0.475 0.191 0.433 0.183 0.433 0.167 0.433

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provide care to people with long-term health problems. The survey also found that: 55 per cent of the above-mentioned caregivers reported negative impacts at their workplace; 27 per cent reported that care giving aected their health and 31 per cent said that care giving disrupted their sleep patterns. The signicant burden of homecare in countries with undeveloped homecare policy is apparent. The introduction of a reimbursement policy from insurance funds is an elementary step for the development of a nationwide homecare programme. The establishment of integrated homecare agencies with nationwide networks of multidisciplinary providers provides outsourcing opportunities. Furthermore, the negotiation of guaranteed rates, carve-out agreements and the ecient gatekeeping by the managed care provider would reduce the risk in capitation models and bring the benets of homecare to the general public. Following the introduction of the reimbursement policy, quality assurance of the provided services is required. In the USA, the deciencies in the quality of homecare services were recognised in 1987, when the Congress passed the rst major change in Medicaid home healthcare certication requirements since the programme was enacted. The Omnibus Budget Reconciliation Act of 1987 requires, among others, the following: assurance of patients rights, establishment of home health aide training requirements and competency evaluations, evaluations of individual clients, stronger enforcement tools, the use of complaint hotlines. Quality of care however, is directly related to stang and labour issues, which have to be addressed prior to the introduction of nationwide homecare programmes. The USA has addressed these issues by introducing the US accreditation programmes. The Joint Commission in

Accreditation of Health Care Organizations (JCAHO) and the Community Health Accreditation Program (CHAP), require minimal level of education for the sta members. Specically, they require that the administrator be trained to a masters level in the health eld and have a minimum of two years health administration experience. Accordingly, nurses have to graduate from an approved post-secondary programme or baccalaureate and have to be licensed to practice nursing, by a local association. Unfortunately, in Greece, the growth of the demand, the shortages of nursing sta, the low wages and the growing use of technology are putting ever-increasing strains on to the provision of professional homecare services. The establishment of modern homecare agencies with clear strategy and solid international experience, the development of a reimbursement policy by insurance funds and the introduction of accreditation programmes by the Greek NHS will assure the provision of ecient services in the emerging Greek homecare market.
References
1 Linsk, N.L., Keigher, S.M. and Osterbusch, S.E. (1988) State policies regarding paid family caregiving, Gerontologist, 28, 202204. Kapp, M. (1990) Homecare client centered systems: Consumer choice vs protection, Generations, 14, 33 35. Doty, P. and Benjamin, A. (1999) In-home supportive services for the elderly and disabled: A comparison of client-directed and professional management models of service delivery, US Department of Health and Human Services, http://aspe.hhs.gov/daltcp/reports/ ihss.htm. Theodorou, M. (2002) Recent reforms in the Greek NHS, Eurohealth, 8, 2932. Souliotis, K. (2001) Healthcare expenditures in Greece 19892000, in J. Kyriopoulos and K. Souliotis, eds, Health Expenditures in Greece (in Greek), Papazisis Publications, Athens. Mossialos, E. (1998) Citizens and Health Systems: Main Results from a Eurobarometer Survey. Oce for Ocial Publication of the European Communities, Luxembourg.

4 5

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Ministry of Finance and National Economy Hellenic Republic, www.ypetho.gr Sissouras, A., Karaokis, A. and Mossialos, E. (1994) Greece in OECD. The Reform of Healthcare Systems in Seventeen Countries, OECD, Paris. Menoudakou, M. (2002) Statement by Greece, 2nd World Assembly on Ageing, Madrid, Spain.

10 European Seniorwatch Observatory and Inventory Care Related Policy: Greece, http:// www.seniorwatch.de/swa/country/greece/ b)care(greece).htm 11 Kemper, P., Applebaum, R. and Harrigan, M. (1987) Community care demonstrations: What have we learned?, Healthcare Financing Review, 4, 87100.

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