Reimbursement models and e-health

The effects of digitalisation have been substantial in many sectors, and it is comes as no surprise that many look to digital solutions as a way of meeting increasing demands on the healthcare system. How healthcare providers are paid is known to be an important factor in determining how they deliver their services. It is therefore important to understand the link between reimbursement models and the use of digital solutions.
This report provides an overview of what is known about the effects of different reimbursement models on provider behaviour with a particular focus on e-health services. The report provides a review of the scientific literature in the field. The report also provides a description of how healthcare in Sweden is reimbursed. Regions in Sweden are free to decide how providers of care should be reimbursed. Models therefore vary across different parts of Sweden.

Based on this review, a number of recommendations and suggestions can be made:

• The use of reimbursement models that give healthcare providers freedom in how they organize care while providing incentives to serve as many patients as possible are in general the models most suitable to allow for the use of novel innovations such as digital solutions. Capitation and bundle payments are examples of such models.
• Given that capitation is the main mechanism used for reimbursement of primary care in Sweden, one might expect that primary care would be a hotbed of innovation. This is clearly not the case, and while there are many aspects outside of the reimbursement system that contribute to the lack of innovation, the common use of capitation in combination with fee-for-service payments for certain activities (such as visits) may cause a lock-in into certain behaviors. The regions should therefore evaluate if it is possible to switch to more pure capitation models, possibly in combination with pay-for-performance measures tied to accessibility to maintain sufficient activity in the system.
• In addition, the regions could consider a coordinated capitation for digital services. This would allow patients to access these services anywhere, thus giving digital providers a sufficiently large market to develop and provide new services while giving the region greater control over their costs.
• The effect of patient co-pay as a mechanism for influencing care-seeking patterns is poorly understood and could be particularly relevant for easy-to-access digital services. Further research on how patient co-pay could be used to steer patients to the appropriate level of care would be warranted.
• The advent of digital primary care centres took large parts of the healthcare system by surprise. It would be beneficial for the regions to coordinate at the national level to be prepared for future developments.
• There is a need for structured follow-up on changes in the reimbursement systems. With longitudinal data on changes to the systems linked to other data from the health care system available in national registries, significant learnings on the effect and optimal design of the systems could be drawn.

Author: Peter Lindgren, Managing Director at IHE – The Swedish Institute for Health Economics, and Professor of Health Economics at Karolinska Institutet.