The Danish Health System

1
The Danish Health System

• Karsten Vrangbæk
• University of Copenhagen
• Political Science

2
The Danish Health System

• A short overview of the Danish health system
• Decentralization and coordination
• Performance and cross regional variation

3
Who is covered?

• Coverage is universal. All those registered as
  resident in Denmark are entitled to health care
  that is largely free at the point of use.

4
What is covered?

• Services The publicly-financed health system
  covers all primary and specialist (hospital)
  services based on medical assessment of need.
• Cost sharing There are very few cost-sharing
  arrangements for publicly-covered services. Cost
  sharing applies to dental care for those aged 18
  and over, to outpatient drugs and to personal
  aids such as glasses (but not hearing aids, which
  are free).
• Out of pocket payments (including cost sharing)
  account for about 14 of total health expenditure
  (World Health Organization 2007).

5
How are revenues generated?

• Publicly-financed health care Since 2007 the
  central government through a centrally-collected
  tax set at 8 of taxable income and earmarked for
  health
• The central government allocates this revenue to
  5 regions (80) and 98 municipalities (20) using
  a risk-adjusted capitation formula and some
  activity-based payment. Public expenditure
  accounts for around 82 of total health
  expenditure.
• Voluntary private health insurance growing fast!

6
How is the delivery system organised?

• Five regions are responsible for providing
  hospital care and own and run hospitals and
  prenatal care centres.
• The regions also finance general practitioners,
  specialists, physiotherapists, dentists and
  pharmaceuticals.
• The 98 municipalities are responsible for public
  health, school dental care, rehabilitation
  outside hospitals

7
How is the delivery system organised?

• Physicians Self-employed general practitioners
  act as gatekeepers to secondary care and are paid
  via a combination of capitation (30) and fee for
  service. Hospital physicians are employed by the
  regions and paid a salary. Non-hospital based
  specialists are paid on a fee for service basis.
• Hospitals Almost all hospitals are publicly
  owned (99 of hospital beds are public). They are
  paid via fixed budgets (determined through soft
  contracts with the regions) and some fee for
  service.

8
How was decentralisation introduced in the Danish
health care system?

• Decentralized democratic management of welfare
  services has been a feature of the Danish system
  for many years.
• A major reform in 1970 reduced the number of
  counties to 14 and established the counties as
  the main public authority within health care. The
  counties took ownership of almost all hospitals
  and became responsible for financing and
  providing health care.

9
How was decentralisation introduced in the Danish
health care system?

• In 2007, a major structural reform introduced 5
  regions to replace the 13 counties. The 271
  municipalites were amalgamated into 98.
• The regions retained the responsibility for
  providing hospital and outpatient care for
  citizens, but importantly lost the right to issue
  taxes, as financing was centralized to the state
  level.

10
Decentralization and its limits

• The regions are responsible for delivering health
  services, within national framework legislation,
  national guidelines and national agreements e.g.
  between medical professionals and the Association
  of Regions.

11
Decentralization and its limits

• National legislation Establishes the duties for
  the Regions in providing health care.
• Free choice of public and some private hospitals
  upon referral
• Access to a range of private facilities in
  Denmark and abroad when waiting times exceed 1
  month.
• Fees for choice patients travelling to other
  regions and private providers are paid according
  to nationally set DRG prices.
• -gt Both types of choice reduce the scope for
  regional level deviation e.g. on waiting times
  and quality

12
Decentralization and its limits

• Planning, guidelines and recommendations
• Developed by the National Board of Health but in
  collaboration with medical societies and regions
• The National Board of health is also in charge of
  general supervision and supervision of medical
  personnel
• The NBoH houses units for Health Technology
  Assessment and development of reference programs
• A comprehensive Danish Program for Quality
  Assessment is currently being implemented.

13
Decentralization and its limits

• Planning, guidelines and recommendations
• A comprehensive Danish Program for Quality
  Assessment is currently being implemented.
• The program combines organizational
  self-assessment with mandatory accreditation
  based on nationally developed standards.
• Hospital level results will be published on the
  internet. And will replace the current
  publication of waiting time and quality
  indicators (sundhedskvalitet.dk)

14
Decentralization and its limits

• National agreements
• Annual agreements between the regions/municipaliti
  es and the government specify expenditure levels
  and average tax levels (for municipalites). - The
  agreements also serve as an arena for negotiating
  new policy initiatives
• National agreements between the Association of
  Regions and medical professions determine
  salaries and working conditions (for hospital
  doctors) and fees for the publicly funded
  contacts to GPs and practicing specialists.

15
Decentralization and its limits

• Some regional and hospital level variation can be
  observed in spite of these coordination
  mechanisms, and the focus on geographical equity
  in the structural reform

16
Regional differences in hospital productivity
Source Ministry of Health and Prevention 2007
17
Regional differences in contacts to general
practice
Source Region Zealand
18
Hospital Variation in Use of Secondary Preventive
Medicine After Discharge for First Acute
Myocardial Infarction During 1995-2004.
Rasmussen S, Abildstrom SZ, Rasmussen JN,
Gislason GH, Schramm TK, Folke F, Køber L,
Torp-Pedersen C, Madsen M, Medical Care 2008
Jan46(1)70-77 
19
Strengths , weaknesses, opportunities and threats

• Expenditure control is good
• Significant activity and productivity increases
  in recent years
• Short hospital stays and high degree of
  conversion to ambulatory care
• Waiting times reduced (one month guarantee in
  place)
• Administrative costs considered to be low
• Patient satisfaction ratings are among the
  highest in Europe.
• Choice and flexibility
• Implementation of cancer packages

OECD Economic Survey for Danmark 2007, Ministry
of Health Benchmarking reports
20
Health Care Expenditure per Capita 2005, USD PPP
21
Satisfaction population reporting the quality of
the following are fairly or very good
Source Euro-barometer, 2007.
22
Affordability of health-care percentage of
persons reporting the following are not very or
not at all affordable
Source Euro-barometer, 2007.
23
Strengths , weaknesses, opportunities and threats

• Life expectancy relatively poor (but improving)
• Scope for quality improvement in some treatment
  areas
• -gt Life style issues rather than health system
  performance per se?

24
Strengths , weaknesses, opportunities and threats
25
Strengths , weaknesses, opportunities and threats
26
Strengths , weaknesses, opportunities and threats
27
Strengths , weaknesses, opportunities and threats
28
Opportunities and threats

• Life style (prevention and health promotion)
• Coordinated care (patient pathways),
• Ageing population (implications for both funding
  and demands for health care),
• More demand for chronic care
• Changing family structure
• Rapid growth in voluntary health insurance and
  private care delivery (threat to solidarity in
  the long run?)
• Reaping the benefits of the new regional
  structure Infrastructure investments and cost
  control
• Internationalization, EU and cross border health
  care
• Implementation of Quality Assessment Program