Elsevier

Health Policy

Volume 81, Issues 2–3, May 2007, Pages 358-367
Health Policy

Decentralized responsibility for costs of outpatient prescription pharmaceuticals in Sweden: Assessment of models for decentralized financing of subsidies from a management perspective

https://doi.org/10.1016/j.healthpol.2006.07.006Get rights and content

Abstract

In this study, models for decentralization of responsibility for costs of subsidised outpatient prescription pharmaceuticals within the county councils in Sweden were studied. The aims of the decentralization were to cut the escalating costs associated with risk sharing mechanisms on a national level and to integrate utilization of drugs into the priority process in health care.

History of development and the characteristics of the solutions on county level were identified, described and analysed from taped interviews with relevant persons in central management positions in the selected counties. Information was supplemented from documentation.

Two main models were found, a population based model and a prescriber based. In the population based model, family medicine in primary care was responsible for subsidies of drugs classified as “basic” (80%) regardless of prescriber. In this model, hospital departments were responsible for the “special” drugs (20%) regardless of prescriber. In the prescriber based model each provider was responsible for costs of its own prescribing. We found that the prescriber based model was chosen for the strong incentives for cost containment, while the population based model was expected to focus more on service to patients.

This reform was based on the assumption that incentives for cost containment on an organisational level are effective. Experiences from other reforms in health care support this hypothesis. This means that there is a risk that cost containment jeopardises medical decisions on patient level.

Section snippets

Background

As in most industrialised countries, pharmaceutical expenditures – as well as total expenditures for health care – have grown rapidly in Sweden [1], [2]. The reasons for this are a continuing development of new and expensive pharmaceuticals [3] for a greying population. In Sweden, the total costs for pharmaceuticals doubled between 1990 and 2001. This increase was more than in any other OECD country [4]. The cost increase was particularly rapid for outpatient prescription pharmaceuticals

Methods

Nine case studies, where each county council was a case, were carried out using qualitative and descriptive methods [13]. After a survey among the county councils of models developed for handling the responsibility for costs of prescription pharmaceuticals, the nine county councils were selected based on their method of decentralization and their progress in the work with the development of the models. The remaining twelve county councils had either not developed a model (10) or had just

Decentralization models

Two main models for decentralization of responsibility for prescription drugs within the PBS were found: a population based and a prescriber based. In the population based model, family medicine in primary care was responsible for costs of pharmaceuticals classified as “basic drugs” regardless of prescriber. “Basic drugs” constituted approximately 80% of the costs of prescription drugs in each county council with a population based model. Each county council did its own classification of

Discussion

In Sweden, the county councils have full responsibility for financing and provision of health care. However, prior to the reforms subsidies for outpatient pharmaceuticals were paid by the state and incentives for the county councils for cost containment were lacking. In reality, outpatient prescription pharmaceuticals were a free utility for the county councils and their physicians. When cost containing incentives are missing, it is likely that prescription decisions to a larger extent are made

Conclusions

Under a system of third party payment patients do not face the full opportunity cost of their use of pharmaceuticals. In systems like this the problems of moral hazard has to be managed otherwise other parts of health care have to face cutbacks. However, as long as the use of pharmaceuticals is cost effective and prioritised in competition with other treatment interventions increased pharmaceutical expenditures do not need to be a problem in itself. The decentralization of the responsibility

Acknowledgement

This study is part of a larger project that was funded by grants from the Västra Götaland region. The performance and design of the study was conducted independent of the funding organisation. The authors have no conflicts of interest to declare.

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