EU HEALTH FACILITY IN VIETNAM

CAPITATIONApproach to Monitoring and Evaluation

Ms Nguyen Thuy Huong, Health Financing ExpertMr Dejan Ostojić, Senior Health Financing Expert

Hanoi, February 2017

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TABLE OF CONTENT

LIST OF ABBREVIATIONS.............................................................................................................................2

INTRODUCTION...........................................................................................................................................4

PART I..........................................................................................................................................................6

MONITORING AND EVALUATION – GENERAL FEATURES........................................................................................6APPROACH TO MONITORING AND EVALUATION OF CAPITATION.............................................................................8INDICATORS FOR MONITORING AND EVALUATION..............................................................................................11

Activity...............................................................................................................................................11Costs..................................................................................................................................................12Quality and Outcomes.......................................................................................................................13Benchmarking....................................................................................................................................15

PART II.......................................................................................................................................................16

MONITORING AND EVALUATION OF CAPITATION IN VIETNAMESE CONTEXT............................................................16Activity...............................................................................................................................................17Costs..................................................................................................................................................17Quality...............................................................................................................................................18Benchmarking....................................................................................................................................21

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List of abbreviations

AIDS - Acquired Immune Deficiency Syndrome

CHS – Commune Health Station

DALY - Disability-Adjusted Life Year

DH – District Hospital

DHC – District Health Centre

EU-HF - European Union Health Facility

FFS - Fee For Service

GPs - General Practitioners

HIV – Human Immunodeficiency Virus

HMOs - Health Maintenance Organisations

ICE - Information, Communication and Education

ICD - International Classification of Diseases

IMR - Infant Mortality Rate

M&E - Monitoring and Evaluation

MoH - Ministry of Health

NCD – Non-Communicable Disease

NSAID – Non-Steroidal Anti-Inflammatory Drug

PHC - Primary Health Care

SMART – Specific, Measurable, Achievable, Relevant, Timely

STGs - Standard Treatment Guidelines

WHO – World Health Organisation

VSS – Vietnam Social Security

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IntroductionA strong health system ensures that people and institutions effectively undertake core functions to improve health outcomes, which should protect citizens from catastrophic financial loss and impoverishment resulting from illness or injury, and should ensure satisfaction of health care needs in an equitable, efficient and sustainable manner.

Many low and middle income countries face significant challenges in providing essential health services due to inefficient use of resources, weak information systems, insufficiently skilled workforce and other systemic challenges. However, even the most resource constrained health system can improve health outcomes by addressing critical systems gaps.

In order to design effective strategies for creating strong health system it is needed to have an access to critical information on the strengths, weaknesses and limitations of the system. This information should be collected through monitoring and evaluation (M&E) process.

Monitoring and evaluation is one of the support areas of ongoing European Union Health Facility (EU-HF) technical assistance to the implementation of the capitation model developed by the Ministry of Health (MoH). EU-HF is committed to key principles and practices that foster a results-oriented management. Instilling these values requires national monitoring and evaluation experts, which need to learn and integrate such values and functions to be able to conduct independent analysis in the future.

The monitoring and evaluation support to the implementation of capitation model has two primary objectives:

Building MoH’s and Vietnam Social Security’s (VSS) capacity at central level to monitor and evaluate implementation of the capitation model aiming to develop a culture of results-based and data-driven public policy decision making.

EU-HF will also support developing the monitoring and evaluation capacities in provinces enabling them to conduct independent, high-quality monitoring and evaluation activities.

EU-HF intends to strengthen the M&E capacity of MoH and VSS and enable these agencies to make informed decisions based on evidence through following activities:

Strengthen MoH and VSS performance management and M&E capacity by improving their ability to identify, collect and analyze data and information;

Conduct evaluations, surveys and assessments to help MoH and VSS deliver results on a meaningful scale;

Provide M&E training and technical assistance for MoH and VSS staff at central and provincial level; and

Provide trainings and facilitate workshops to transfer M&E knowledge, skills and methods to the national counterparts.

This document consists of two main parts. The first part elaborates on approach and general features of monitoring and evaluation system, and describes set of M&E indicators for monitoring of activity, costs, quality and outcomes. The second part is focused on M&E of the capitation model in Vietnam

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aiming to provide an advice on possible M&E options for measuring the rate at which resources are used for health care services paid by capitation, to discuss some of the issues related to screening of providers and quality of health care at grassroots level raised in the process of such measurement, and to establish, at least in part, a basis or a benchmark for use in any revision of the health policies in the future. Moreover, because the achievement of similar levels of health outcomes with a wide variation in total resource use points to the possibility of containing or reducing expenditures by a better allocation of health resources, while still maintaining favourable health outcomes.

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PART I

Monitoring and evaluation – general featuresMonitoring and evaluation is a process that helps improve performance and achieve results. Its goal is to improve current and future management of outputs, outcomes and impact.

Monitoring is important because its results allow to:

Check status and measure efficiency of implementation; Assure continuous feedback on progress; Identify challenges and obstacles; Assess the adequacy of a work plan; Improve project design and function during implementation and activities; Provide feedback in terms of probability of achieving the results; Take corrective measures during implementation.

Evaluation is necessary in order to assure:

Systematic assessment (effectiveness, efficiency, etc.) of a program, an intervention, an activity, etc.;

Systematic assessment of information and evidence to provide feedback about a program, an intervention, an activity, etc.;

Reliable and sufficient inputs for corrective measures; Improvement of decision-making; Support for policy formulation and strategic planning.

Defining purpose and scope of monitoring and evaluation (time, available resources) is the first step in the development of M&E system. Individuals, groups, organizations that can affect or are affected by monitoring and evaluation process should be identified as well.

In order to enable all preconditions for successful and effective monitoring and evaluation a set of indicators and measurement tools should be developed and incorporated in a monitoring and evaluation plan. Indicators should provide alerts for underperformance in reaching the targets and information on any variability in performance. They should be specific to desired outcomes and should provide continuous feedback throughout the implementation about:

Inputs; Activities; Outputs; Outcomes; Impact (proximal, intermediate, distal).

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Monitoring is focused on tracking, while evaluation is focused on verification. Some of the key features of monitoring and evaluation are presented below (Table 1).1

Table 1.

Monitoring Evaluation Data collection

o Ongoingo Systematic

Data availabilityo Accessibleo Existing recordso Inventories

Primary focus: input, activities, outputs, outcomes – performance

Internal efforts Systematic tracking key components

(inputs, activities, progress, etc.) Assess the alignment of implementation

with original intent and design Identifies need for

modification/adaptation Identify what has changed Tracking change (performance) in relation

to outcome targets

Data collectiono Baselineo Post program comparisons

Data availabilityo Requires measurement specific to

hypothesized outcomes Primary focus: outcomes, impact,

sustainability Often incorporates external efforts Episodic assessment of change associated

with implementation Determine the effectiveness and efficiency

of implementation process Assessment of inputs, activities other

components to identify contribution to outcomes

Assessment of outcome and impact in terms of investment, substance and value

Aiming to assure effective and efficient monitoring it is of utmost importance to adequately define the monitoring indicators. One of the most common approaches in defining the monitoring indicators is SMART approach:2

Specific: precisely defined objectives; Measureable: progress toward objectives can be measured; Achievable: expectations that indicators are able to be tracked and will change given the

environment and existing resources and time; Relevant: program outcomes support organizational mission and goals and be realistic and

feasible to collect; Timely: clear statements of when objectives will be accomplished, knowledge of time taken to

collect data, lag between activities, outputs and outcomes.

1 https://tei.cgu.edu/ 2 Specific, Measureable, Achievable, Realistic and Timely, Drucker, P., The Practice of Management, Harper, New York, 1954; Heinemann, London, 1955; revised edition, Butterworth-Heinemann, 2007.

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Once the M&E indicators are defined it is necessary to decide on frequency of measurement. The role of measurement is to provide credible information and to inform decisions. Through monitoring and measurement decision makers are getting informed about:3

Program and/or intervention effectiveness; Program and/or intervention efficiency; Identification of differential impact;

o Ability to target program/intervention to those benefiting most;o Identification of areas/populations needing something else;

Identification of risk and unintended consequences; Budget allocation –program/intervention funding.

Approach to monitoring and evaluation of capitationHealth care providers are economic beings that are driven by their economic motives. Sometimes the providers may behave in their own best interest, to the detriment of the patients, at the expense of health system performance. However, money can be used to alter providers’ behaviour towards the interests of patients. Capitation-based reimbursement significantly influences the health service provision, therefore capitation as a provider payment system must incorporate checks and balances that protect, both, patients and providers.

These are the theoretical reasons why payment systems to health care providers become important. The payment system is concerned with how and how much the providers of health care are paid. The mode of payment can create powerful incentives affecting the provider’s behaviour, and the changes in behaviour will affect the quantity, quality, costs and efficiency of health interventions.

The term allocative efficiency is often used by the economists with a meaning doing the right things, or producing goods and services that are needed and/or desirable. This should be distinguished from the term technical efficiency, or doing things right, which means produce the desired output at the lowest total cost.

Allocative efficiency in health care must be given some other meaning. One alternative meaning relates the costs of different health care services to the health outcomes — the improvements in health — they yield. It does not matter, for this purpose, whether the improved health results from preventing a loss of health from disease or accident, restoring health or curing the health problem, or palliating its consequences.4

Any health care service or intervention is in principle characterized by, both, a health outcome and a cost of provision, both of which may vary with the scale of production and with the characteristics of the providers and the consumers. The ratio of cost to outcome is then the cost-effectiveness ratio of the service or intervention, estimated as an overall average or for larger or smaller changes at the margin.

3 https://tei.cgu.edu/4 Liu, Xingzhu. Policy tools for allocative efficiency of health services, World Health Organization 2003.

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Allocative efficiency results, on this definition, from that combination of health care interventions which, besides minimizing the cost of producing each service, maximizes cost effectiveness. That is the combination which delivers the largest gain in health status for a given total expenditure; or requires the smallest expenditure for a given improvement in health. This is what is usually meant by getting value for money in health care. When all health care is controlled by a single agency such as a national government, which pays for the care even if it is not the direct provider, and which is equally responsible, and responsive, to all citizens maximizing cost-effectiveness may be a reasonable policy objective, so it is also reasonable to search for tools which may promote that outcome.5

If applied properly a capitation could be an effective tool to control costs, because it motivates providers to provide less costly, preventive, and cost-effective interventions, which all contributes to the achievement of allocative efficiency.

Additional positive effects can be achieved, in case if the capacity of health care providers allows for provision of wide range interventions and if capitation payment could include a wide range of interventions; the performance of providers is regularly monitored; and the results of monitoring are used to adjust the level of capitation payment. There should also be competition among providers for patients’ registration, and capitation payment should be risk-adjusted. The positive effect of capitation can be further strengthened by introducing Fee For Service (FFS) payment for specified services and interventions.

Capitation is a method that allows reimbursing providers for making available specified services and possibly delivering specified outcomes for a defined target population. In order to ensure high quality care is delivered, in addition to setting minimum quality standards, a payer/purchaser (health insurance find) can require a proportion of the payment itself to be dependent on a provider achieving specified quality targets and outcomes for patients in the target group.

The most important advantage of capitation payment method is that it removes the economic incentive for overprovision of services, adds an incentive to provide cost-effective care including provision of preventive services, and thus helps to better control health care costs. Patients should benefit from better overall health because providers will focus more attention on the following three types of prevention:6

primary prevention: which aims to keep people healthy by reducing the incidence and overall burden of disease in the population; this can be achieved by focusing on lifestyle and behaviour change and/or environmental factors;

secondary prevention: which aims to reduce the overall cost of treating a condition through early diagnosis and treatment of patients who have a single long-term condition;

5 Liu, Xingzhu. Policy tools for allocative efficiency of health services, World Health Organization 2003.6 Capitation: a potential new payment model to enable integrated care, 26 November 2014, NHS England Publications Gateway Reference 02457.

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tertiary prevention:7 which is particularly relevant for patients with complex needs and focuses on their recovery, rehabilitation and re-enablement ??? after acute exacerbation of their chronic illness.

Because the provider is responsible for providing the contracted package of services with the fixed payment, this can motivate the provider to innovate in cost-reducing technology, the use of lower-cost alternative treatment settings, and the provision of cost-effective care. This change in economic incentive is related not only to cost containment, but also to the improvement of allocative efficiency. Capitation payment will encourage physicians to provide preventive services, health screening and diagnostic services because the prevention of disease can avoid treatment cost, and earlier detection and diagnosis can reduce the costs of treatment resulting from progression. Capitated physicians would be more willing to provide care for acute patients than for patients who have self-limiting, chronic or terminal diseases.8

Although capitated payments offer the potential benefits outlined above, they may present a number of risks if they are not well designed and implemented. Unless adequate safeguards are in place to mitigate these risks capitation payment provides no incentive for unnecessary care, but it may provide incentives for reducing the provision of necessary care. The provider, especially the private health care providers, will try to select low-risk clients, and reject the high-risk ones if the capitation payment is not adjusted for individual risk. For example, the evidence from the United States indicates that Health Maintenance Organisations (HMOs) had healthier enrollees than the rest of the population, suggesting they had selected favourable risks to some extent.9

The provider may reduce the quality of care to reduce costs. This can be done by using low-quality premises and equipment, reduction in the number of necessary tests, decrease in the length of services, longer waiting lists resulting from too many registrations, and so on. The patient is more likely to be referred to a specialist or a hospital than necessary, because more referral means less cost for the capitated provider.

To assure the quality and the quantity of health services under capitation, competition is suggested in many countries where the clients are given freedom of choice of general practitioners (GPs). The GPs have to compete for registrations by assuring reasonable quality and the necessary quantity of services. In addition, to assure quality, the number of registrations should be limited by regulation, as is in the United Kingdom.10

7 Incentives related to primary, secondary and tertiary prevention are directly related to the choice of the target population. For example, primary prevention will mainly concern relatively healthy patients to reduce the likelihood of a disease, while tertiary prevention is particularly relevant for selected high risk population groups, which might have complex care needs with multiple long term conditions.8 Liu, Xingzhu. Policy tools for allocative efficiency of health services, World Health Organization 2003.9 Congressional Budget Office. Effects of managed care: an update. Washington DC, CBO Memorandum, 1994.10 Capitation: a potential new payment model to enable integrated care, 26 November 2014, NHS England Publications Gateway Reference 02457.

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Indicators for monitoring and evaluationThis section outlines the indicators that can be used for monitoring of activity, costs, quality and outcomes, which is crucial to enable the success of any capitation model. These indicators could also be used for benchmarking purposes. Checks and balances are needed in the system to ensure that resources are devoted to maintaining quality and access to necessary services. The governance structure should monitor performance and support innovative practice by:11

a payer/purchaser undertaking regular (for example monthly or quarterly) monitoring, including leading indicators that provide early warning of unexpected demand patterns;

the providers undertaking regular data (activity, cost and quality) validation exercises focusing on completeness and accuracy, as well as looking for risks and issues (such as risks and issues around safety of health care and/or quality of health care)

ActivityActivity reporting and monitoring is crucial to the success of any capitation model, as it serves two key purposes:

it enables a payer/purchaser and a provider (capitation budget holder) to assess whether some of the activity is shifting (e.g. from hospital to community setting) as intended following the implementation of the new payment and care delivery model.

it allows the identification of areas where activity may be decreasing, which makes it easier to ensure that the providers are not restricting access to care (cherry picking patients or reducing the volume of care provided).

In some areas, detailed activity data will be easily available (eg. acute health care). However, in other care settings or types of care (e.g. community health, social care), activity data may be less readily available. In these cases, at a minimum the number of points of contact with the care system must be collected for each patient.

Some basic activity indicators that could be considered for monitoring of any capitation model are:

Scope of services provided in a health care facility; Productivity - number of consultations per facility, per person, per doctor; Geographic origin of the patients - for each consultation; Number of referrals (outpatient, inpatient); Consultation time per patient; Prescription practice (generic drugs, essential drugs, brand-name drugs); etc.

11 Capitation: a potential new payment model to enable integrated care, 26 November 2014, NHS England Publications Gateway Reference 02457.

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Some of the activity indicators related to efficiency and rational use of resources for primary health care or for family medicine that could be monitored are:12

First consultations; Repeated consultations; Ratio of repeated to first consultations; Home visits; Prescription practice; Diagnostic and lab (X-ray, ultrasound, lab tests, etc.); Referrals.

CostsThis concerns ways to control either the costs of individual interventions, or the total expenditure on services for a defined population. This is of course consistent with technical efficiency, which is always desirable. It is also consistent with allocative efficiency, to the extent that it means promoting more cost-effective means of dealing with any particular health problem, whether or not explicit choices are made about the relative priority of different health problems.

Allocation of more resources to primary and preventive care, which is highly cost-effective or even cost-saving, will improve allocative efficiency, but there seems to be no clear mechanism for achieving the desirable resource shifts. In low- and middle-income countries, although an essential package of cost-effective health interventions can eliminate about 30% of the Disability-Adjusted Life Year (DALY) lost at a little cost, these health interventions are underfunded and resource allocation is biased towards less cost-effective hospital services.13 Disease prevention is proved to be a far more comprehensive and compelling solution to improve population health and control costs, and the experiences of many prevention programmes have documented reduction in the costs of expensive medical interventions of 15–20% and even more.14

Some of the basic cost indicators that could be considered for monitoring of a capitation model are:

Out-of-pocket expenditure as percentage of total expenditure on health; Structure of expenditures (staff, services, drugs, investments, etc.); Expenditure per person; Expenditure per visit; Expenditure on essential drugs; Expenditure ratio of prescribed brand name drugs to generic drugs; Expenditure ratio of prescribed brand name drugs to essential drugs; Ratio of claimed to verified invoices with elaboration of reasons for non reimbursement; etc.

12 Metodologija određivanja vrijednosti kapitacije i cijena zdravstvenih usluga u primarnoj zdravstvenoj zaštiti, Republički fond za zdravstveno osiguranje, Podgorica, 2007.13 http://www.worldbank.org/en/publication/wdr/wdr-archive 14 Liu, Xingzhu. Policy tools for allocative efficiency of health services, World Health Organization 2003.

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Quality and OutcomesPerformance on quality and outcome measures should be incorporated in any capitation model. Targets could for instance relate to the clinical quality of health care, patient experience (including waiting times) and patient involvement in decision-making (including choice). In addition to indicators incorporated into a capitation model, quality and outcome standards need to be maintained, to ensure that providers do not have a perverse incentive to reduce access to health care, quality and/or patient experience.

Health care quality is "the degree to which health care services for individuals and populations increase the likelihood of desired health outcomes and are consistent with current professional knowledge." The quality indicators are measures of health care quality that make use of readily available data and can be used to highlight potential quality concerns, identify areas that need further study and investigation, and track changes over time.15

Quality management in healthcare is of critical importance to the healthcare industry and the patient. Everyone in the loop - from physicians to practitioners to support staff - needs to be aware of the importance of quality management in healthcare. The most basic purpose of imparting high quality management in healthcare is to make sure that the patient is well taken care of. For this to happen, the healthcare setting has to implement systems and processes.16

Healthcare quality problems fall into three broad categories:17

Underuse. Many patients do not receive medically necessary care. Misuse. Each year, a number of patients get the wrong care and are injured as a result. Overuse. Many patients receive care that is not needed or for which there is an equally effective

alternative that costs less money or causes fewer side effects.

Quality measures and clinical outcomes to review performance of the care model can be used to promote efficiency by enabling providers to judge the best intervention holistically for an individual or for a specific population group.

Reporting and monitoring quality and outcomes is an important way for a payer to ensure that the capitation model does not incentivise the capitated budget holder (provider) to restrict access to care or reduce quality. Finally, it could promote productive efficiency by incentivising care to take place in the most appropriate setting and investment in care co-ordination. In the longer term, it would be useful to develop standardised national outcomes which could include patient experience/involvement and/or clinical outcomes, adjusted for patient complexity.

Defining quality and outcomes incentives, quality and outcome measures can also be used to pay for performance, which entails a bonus payment or eventually a penalty for underperformance18 against pre-determined metrics and targets. This could result in the payer basing an agreed percentage of 15 www.ahrq.gov 16 http://www.mentorhealth.com 17 www.ncqa.org 18 Usually in a form of % reduction of a payment.

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payment as a quality bonus, certainly an essential aspect in a context of health care system with low salaries.

Depending on the development level of health care the quality indicators could be defined for monitoring of:

Patient’s records (availability, accuracy, etc.); Medical documentation (availability, relevance, completeness, etc.); ICD coding (morbidity and co-morbidity); Specific area of health care (prevention, inpatient, patients’ safety, pediatric, etc.); Quality of prescription (failure to use needed medicines - underuse, incorrect medicines use –

misuse); Human Resources; Premises; Equipment; Infrastructure; etc.

Some of the indicators that could be considered for monitoring of the outcomes are:

Indicators of leading cause of morbidity and mortality, in general, for specific groups (age, gender, NCD risk-factors, acquired NCD, occupation).

Maternal mortality ratio per 100,000 live births. Maternal death is the death of a woman while pregnant or within 42 days of termination of pregnancy, irrespective of the duration and site of the pregnancy, from any cause related to or aggravated by the pregnancy or its management but not from accidental or incidental causes.19

Infant mortality rate under 1 year (‰). The infant mortality rate (IMR) is the number of deaths of infants under one year old per 1,000 live births. This rate is often used as an indicator of the level of health in a country.

Underweight malnutrition children under 5 years (%). Child malnutrition – as measured by poor child growth – is an important indicator for monitoring population nutritional status and health. In 2015, about 15%, or 92 million children under five years of age in less developed regions were underweight (low weight-for-age according to the WHO child growth standards).20

etc.

BenchmarkingBenchmarking serves two key purposes in the context of a capitation payment model, as it supports both, setting appropriate prices and managing (financial and clinical) risk. To achieve this, the various types of information described above (activity, cost, and quality and outcomes) could be benchmarked. In order to make the benchmarking meaningful for improvement of decision-making it is necessary to

19 www.who.int 20 www.who.int

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properly define monitoring indicators. A proposed approach would entail using consistent measures for:21

activity: this would involve similar definitions of the types of activity locally agreed (whether diagnosis, presentation or treatment based). For instance, where available the units of activity used to collect reference costs may constitute an easier way to ensure consistency across localities;

cost: this entails similar cost objects (which could be the units of activity mentioned above), and consistent methodology to allocate cost to these cost objects;

quality and outcomes: this would require not only consistent metrics, but also similar measurement methodologies and also standardised formula.

21 Capitation: a potential new payment model to enable integrated care, 26 November 2014, NHS England Publications Gateway Reference 02457.

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PART II

Monitoring and Evaluation of capitation in Vietnamese contextResource constraints in the health sector make it critical to keep close track of what it costs to produce health care services. The number of services produced in relation to their costs will give some indication of the efficiency of production, both, for individual health care facilities and for the health system as a whole. Good health planning and health management cannot be performed without the availability of cost and utilization data, or without associated analyses relating the two. These data, and subsequent analyses, help policymakers to know how efficient and effective health care delivery system is, as compared to how efficient and effective it could be.

This paper does not intend tell which monitoring and evaluation tools to take up since this should be decided by relevant health authorities in Vietnam. It rather intends to provide an advice about possible options and how to determine which M&E tools are most likely to be put into a serviceable toolkit that is feasible and effective, given the particular circumstances of political, technical and administrative capacity, knowledge, and other relevant factors.

The proposed tools take up on existing M&E systems in the health care sector of Vietnam, as well as on the indicators defined in the Draft Circular on capitation prepared by the MoH on 09 of February 2017. The Circular on capitation is still under revision and it is possible that some of the defined indicators in this section will not be considered in the final version of the document. Since the performance indicators are not yet clearly defined in the Draft Circular, the set of performance indicators for monitoring and evaluation would be also defined after endorsement of the Circular by the MoH. Taking this into account the indicators proposed in this section should be considered as a menu for selection of M&E indicators across the key areas (activity, costs, quality and outcomes), therefore this paper should be assumed as a proposed framework for M&E and it would be revised accordingly. Further upgrade of M&E tools will be based on the results of monitoring and evaluation of the capitation model after implementation in selected provinces in 2018, in order to assure that the toolkit is fully adjusted to the Vietnamese context aiming to provide useful M&E system for the capitation model from holistic, functional and individual perspective.

As it was already mentioned above, the key areas for monitoring and evaluation of any capitation model are: activity, costs, quality and outcomes. However, taking into account peculiarities of Vietnamese context strong suggestion would be to start first with monitoring of activity, costs and quality. Afterwards could be included monitoring of outcomes, including impact analysis.

Monitoring and evaluation are needed to ensure that resources are devoted to maintaining quality and access to necessary health care services. M&E activities could be undertaken at the level of health care facilities (providers), but the results of these activities should be aggregated and analyzed at district or provincial level depending on availability of human, technical and financial resources. The MoH and VSS should monitor performance by:

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monthly and/or quarterly monitoring of leading indicators; regular data validation (activity, cost and quality) focusing on completeness and accuracy, as

well as looking for risks and issues related to safety of health care and/or quality of health care.

ActivitySome of the indicators that could be considered for monitoring of the capitation model with regard to activity could be:

Scope of outpatient services covered in health care facilities; Number of health insurance cards registered at a health care facility (quarterly, annual);22

Number of outpatient consultations per month/quarter/year – this could be monitored at the level of a provider (CHS, DH, DHC, a polyclinic);

Number of outpatient consultations per age group (monthly, quarterly, annual);23

Number of referrals per month/quarter/year - this could be monitored at the level of a provider (CHS, DH, DHC, a polyclinic);

Ratio of incoming referrals to outpatient consultations; Ratio of outgoing referrals to outpatient consultations; Ratio of shifts to inpatient treatment;24

Ratio of returning patients for NCD-risk monitoring (as a part of NCD risks factors control); Geographic origin of the patients - for each consultation; Number of first consultations; Number of repeated consultations; Ratio of repeated to first consultations; Number of consultations per insured; Number of outpatient consultations per doctor; Quantity of drugs prescribed per visit; Number of tests per treatment; Number of imaging services per treatment; Consultation time per patient; etc.

CostsAllocation of more resources to grassroots health care is one of health policy goals of the MoH, therefore cost indicators must allow for monitoring of spending at this level of health care. In addition to these indicators some general cost indicators related to structure of expenditures and expenditure per SHI card holder should be defined as well. The indicators that could be considered for monitoring of the capitation model with regard to costs could be:

Outpatient expenditure per insured paid by SHI capitation fund (quarterly, annual);22 Draft Circular on capitation, Article 2, Clause 3, 09 February 2017.23 Draft Circular on capitation, Article 2, Clause 4, 09 February 2017.24 Draft Circular on capitation, Article 11, 09 February 2017.

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Outpatient expenditure per health care facility paid by SHI capitation fund (quarterly, annual);25

Outpatient expenditure per age group (monthly, quarterly, annual);26

Ratio of outpatient expenditure paid by SHI capitation fund to total health expenditure; Prescription practice:27 28 29 30

o Unnecessary medicine use (overuse): Percentage encounters with an antibiotic prescribed (antibiotic use); Percentage encounters with an injection prescribed (inequality);

o Unnecessary use of highly priced medicines: Percentage of drugs prescribed by generic name (low cost prescribing); Percentage of drugs prescribed from National Essential Medicine List or

Formulary (low cost prescribing);o Drug expenditure per insured in grassroots settings (health care facilities) – paid by SHI

capitation fund (budget impact). Ratio of claimed to verified invoices – what is the reason for non reimbursement; Providers with a surplus - % of surplus in comparison to allocated capitation fund in that period; Providers with a deficit - % of deficit in comparison to allocated capitation fund in that period; Costs incurred as a result of application of new health services and other related factors;31

etc.

QualityMonitoring the quality of health care is an important way for a payer to ensure that the capitation model does not incentivise the capitated budget holder (provider) to restrict access to care or reduce quality. It could promote productive efficiency by incentivising care to take place in the most appropriate setting and investment in care co-ordination. A possible approach could be to have local quality scorecards or dashboards to measure quality and outcomes that can also be used to support a formative evaluation.

Quality incentives can be used to pay for performance, which entails a bonus payment or a penalty, based on the performance of a provider or group of providers, which could result in allocating an agreed percentage of payment as a quality bonus.

Some of general indicators that could be considered for monitoring the quality of provided services paid by capitation are:

Patient’s records (availability, accuracy, etc.); Medical documentation (availability, relevance, completeness, etc.);

25 Draft Circular on capitation, Article 10, Clause 2, 09 February 2017.26 Draft Circular on capitation, Article 2, Clause 4, 09 February 2017.27 Circular No.: 05/2016/TT-BYT, Regulations on prescription in outpatient treatment, Hanoi, February 29, 2016.28 Circular No. 45/2013/TT-BYT, Promulgating the essential western medicines version VI, Hanoi, December 26, 2013.29 Circular No. 40/2014/TT-BYT, Promulgation of and guidance on the list of modern medicines covered by health insurance, Hanoi, 17 November 2014.30 Essential medicines for universal health coverage, The Lancet Commissions, Lancet 2017.31 Draft Circular on capitation, Article 3, Clause 9, 09 February 2017.

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ICD coding (morbidity and co-morbidity);32

Specific area of health care (prevention, inpatient, patients’ safety, pediatric, etc.); Human Resources; Equipment; Quality of prescription:33

o Failure to use needed medicines (underuse): >1 defined daily dose beta agonist and <1 defined daily dose of inhaled steroids

and beta agonists in patients aged 15–44 years (asthma); Percentage of patients aged 18–80 years with chronic kidney disease stages 4–5

and hypertension in the absence of low diastolic blood pressure (chronic kidney disease);

Number of patients with history of peptic ulceration or gastrointestinal bleed, not prescribed gastro protection and prescribed NSAID (medication safety);

o Incorrect medicines use (misuse): Volume of psychotropic drug volume in one area exceeds average by factor of

two or more (drug abuse); Percentage of patients ≥18 years of age with estimated glomerular filtration rate

of <30 mL/min/1·73 m² and diabetes who are prescribed metformin (chronic kidney disease).

Premises; Infrastructure; etc;

In addition to abovementioned, as quality monitoring indicators could be used already existing standards at national level:

1) National standards for commune health until 202034 - % of communes reached national criteria for commune health. These standards define main functions and duties of CHSs, indicators and scoring mechanisms for monitoring the activities and quality in CHSs covering the following areas:

o Criterion 1. Steering and managing health care activitieso Criterion 2. Health human resourceso Criterion 3. CHS Infrastructureo Criterion 4. Equipment, drugs, and other facilitieso Criterion 5. Planning-Budgetingo Criterion 6. Preventive medicine, HIV/AIDS prevention and control, environmental

hygiene and food safetyo Criterion 7. Medical examination, treatment, rehabilitation and traditional medicine

32 This will be integrated in PHC/NCD periodic health examination record instrument by the Primary Health Care/Non Communicable Diseases (PHC/NCD) team of the EU-HF.33 Essential medicines for universal health coverage, The Lancet Commissions, Lancet 2017.34 Decision No.: 4667/QĐ-BYT on the issuance of the national criteria for commune health until 2020, Hanoi, 7 November 2014.

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o Criterion 8. Maternal and Child Health careo Criterion 9. Population and family planningo Criterion 10. Health information, communication and education (IEC)

2) Quality standards for hospitals applicable for district hospitals35

Introduction of quality improvement measures in line with the following national quality criteria for hospitals:

SECTION A. PATIENT- CENTERED (A1.1 Patients are instructed clearly and given thoughtful reception and guide, A1.3 The hospital conducts improvement of medical examination procedure for patients’ satisfaction, A2.5 People with disabilities have access to departments/ wards and facilities in the hospital, A3. Patient Care Environment, A4. Rights and interests of the patient)

SECTION B. HUMAN-RESOURCE FOR HEALTH-CENTERED (B2. Quality of health workforce)

SECTION C. PROFESSIONAL ACTIVITIES (C1. Ensure safety of infrastructure, equipment, chemicals, C2. Management of Medical records, C3. Application of information technology, C9. Management of supplies and use of drugs, C8. Testing quality)

SECTION D. QUALITY IMPROVEMENT ACTIVITIES (D1. Establishing the system and implement quality improvement plans, D3. Assessing, measurement of and publicizing the hospital quality)

Use of national Standard Treatment Guidelines (STGs), which implies prescription of generic and essential drugs that will support cost containment in grassroots health care facilities (CHS, DH, DHS, polyclinic);

Reception of patients and attitudes of health workers – collection of information through patients’ feedback mechanisms.

Incentives for quality improvement

Key concerns for the development of health care and achievement of universal health coverage goals in Vietnam are capacity of health care providers and quality of health care, especially, at grassroots level. Therefore, it would be of utmost importance that M&E mechanism that is integrated in the capitation model provides mechanisms not just for monitoring and evaluation of quality indicators, but also provisions incentives for capacity and quality improvement. Some of the suggested options for consideration are presented below:

Incentives for quality improvement in relation to the following national quality criteria for hospitals:36

35 Hospital Quality Standards (Circular 19/2013/TT-BYT dated 12/7/2013 on guidelines to management of service quality in hospitals, and Decision 4858/QĐ-BYT on piloting of the set of hospital quality assessment criteria).36 Hospital Quality Standards (Circular 19/2013/TT-BYT dated 12/7/2013 on guidelines to management of service quality in hospitals, and Decision 4858/QĐ-BYT on piloting of the set of hospital quality assessment criteria).

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SECTION A. PATIENT- CENTERED (A1.1 Patients are instructed clearly and given thoughtful reception and guide, A1.3 The hospital conducts improvement of medical examination procedure for patients’ satisfaction, A2.5 People with disabilities have access to departments/ wards and facilities in the hospital, A3. Patient Care Environment, A4. Rights and interests of the patient) – 2% on top of a capitation budget.

SECTION B. HUMAN-RESOURCE FOR HEALTH-CENTERED (B2. Quality of health workforce) – 2% on top of a capitation budget.

SECTION C. PROFESSIONAL ACTIVITIES (C1. Ensure safety of infrastructure, equipment, chemicals, C2. Management of Medical records, C3. Application of information technology, C9. Management of supplies and use of drugs, C8. Testing quality) – 2% on top of a capitation budget

SECTION D. QUALITY IMPROVEMENT ACTIVITIES (D1. Establishing the system and implement quality improvement plans, D3. Assessing, measurement of and publicizing the hospital quality) – 2% on top of a capitation budget

Incentives for quality improvement in relation to the national criteria for commune health until 2020 – 5% on top of a capitation budget37 The CHSs that do not fully meet the national criteria will receive incentives for partial achievement of the criteria. The partial achievements will be calculated as a % of full criteria achievement. (eg. if a CHS meets 70% of the national criteria for commune health until 2020, this CHS will receive 3,5% incentive on top of a capitation budget38)

Incentives for use of national Standard Treatment Guidelines, which are applicable for capitation package (eg. hypertension, diabetes type 2, etc.), which implies prescription of generic and essential drugs. – 5% on top of a capitation budget. If a health care facility does not apply all existing national STGs related to capitation package will receive incentives based on a relative number of used STGs out of total available for capitation package. The incentive for partial utilization will be calculated as a % of all existing STGs (eg. if a health care facility applies 10 out of 20 national STGs, this health care facility will receive 50% of provisioned incentive for this indicator (5%), which means that it will get 2,5% on top of a capitation budget).

BenchmarkingAlthough there are many forms of benchmarking, they can be classified into three categories – internal, competitive and strategic:39

Internal benchmarking is used when a company already has established and proven best practices and they simply need to share them.

Competitive benchmarking is used when a company wants to evaluate its position within its industry. In addition, competitive benchmarking is used when a company needs to identify industry leadership performance targets.

37 Decision No.: 4667/QĐ-BYT on the issuance of the national criteria for commune health until 2020, Hanoi, 7 November 201438 CHS incentive = % national criteria achievement (70% of 5% is equal to 3,5%)39 https://www.isixsigma.com/methodology/benchmarking/understanding-purpose-and-use-benchmarking/

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Strategic benchmarking is used when identifying and analyzing world-class performance. This form of benchmarking is used most when a company needs to go outside of its own industry. Often, these benchmarks are obtained from outside industries.

Translated into the context of health sector in Vietnam, competitive benchmarking would be the most appropriate to apply for, both, capacity of health care providers at grassroots level and quality of health care in these health care facilities.

In the context of any capitation payment model benchmarking usually serves two key purposes, setting appropriate prices and managing (financial and clinical) risk. To achieve this, the various types of information described above (activity, cost, and quality and outcomes) could be benchmarked.

In the short term, the benchmarking could be achieved through the reporting of the same indicators, selected for the key areas (activity, costs, quality), from year to year on, across different health care facilities that implement capitation. In the beginning, it would be advisable that some of the indicators for benchmarking are the ones that are already collected at a national level.

A short term approach to benchmark activity and cost for comparable population segmentations (e.g. patients with multiple long term conditions) would be to start with the benchmark of average annual cost per patient, for the selected age groups of population, which could then possibly be broken down by health care facility and/or type of health care. As an example, average annual cost per patient in age group of 60+ at national level, per province, or per district.

Since the capacity for health care provision and quality of health care are already highlighted as issues of key concern, a short term approach could for instance be to benchmark some of the indicators that are already collected at a national level, either defined in national quality criteria for hospitals or national criteria for commune health until 2020.

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