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Managerial autonomyManagerial autonomy is giving line managers the autonomy to fulfill their jobs however they see best. However, governance arrangements in many countries provide little if any autonomy to line managers. This has at least two harmful effects: it deprives managers of the freedom to adapt services to local conditions and to manage staff and resources flexibly, and it hinders the development of general management skills in the public sector. Standard rationales for limiting managerial autonomy are to ensure consistent policy implementation and prevent corruption. Wide-ranging autonomy should not be introduced into public sectors characterized by informality and weak rule-enforcement. ((Khaleghian and Gupta, 2004) DecentralizationIn general, attempts to decentralize have been disasters. While many organizations (not only health care) are making attempts to decentralize in order to promote accountability, very few organizations have the training, management skills, or concurrency of information in order to make a decentralized system work. While decentralization may in theory provide better and faster decisions at the level of management, decentralization also is more costly and requires better management skills of all those involved. Decentralization does not mean that the lower level units are cut loose to do what they want to do, it does not mean that lower level staff are left to learn on their own without proper guidance, and it does not mean that the higher levels staff no longer have to manage. Decentralization means that the staff at these units must be given the education and the experience to be able to intelligently make decisions. It means that the higher level supervisors must have data to judge how well their lower level units are doing and This requires a lot of control and training and very few organizations have the control are the training needed to make this work. While it is argued that decentralization promotes better health care and better management of resources, it is very doubtful that this will occur unless the proper management systems are put in place. Each organization may provide services consistent with their own models and schemes of care. This creates services that overlap, information system that are unable to understand each other, and administrative procedures that creates duplication and excessive overhead. These individual organizations tend to pass information back and forth with no one taking responsible for the results or implementation of solutions. As an example, in 1996 Mexico implemented a country epidemiological surveillance system that was integrated into “different public sector institutions…which generates information from the different health services at the technical-administrative levels”… Competition Competition leads to a decline in information-sharing and technical assistance between public health agencies with negative consequences for disease surveillance and training opportunities for lower-level staff. The need to generate revenues leads to an underprovision (surveillance, health education, preventive services) of public goods and a bias toward high-revenue services such as fee-based health inspections; reduced efficiency by causing duplicate inspections from public health agencies at different levels—each of them motivated by the need to generate revenues—and a general overprovision of inspections; and have negative equity effects because of agencies’ tendency to focus on profitable enterprises rather than carrying out inspections across the board. The most significant finding is a fall in the provision of public preventive services that can not be charged for (Khaleghian and Gupta, 2004) Healthcare MarketingHealth Care Services are not marketed. Health Care Organizations must learn to “Market” health care services. The health care organization must sell their product (in this case health care or research) just as any other commodity. This means that an organization must offer the best product at the best price. If an organization does not operate effectively and efficiently and produce a product that has value to the community, it will and should fail. It should no longer be the case, that because the organization calls itself a "research organization" that donor organizations should continue funding it. The health care organization, be it a NGO or some other organization, must learn to compete in the market. The driving force of an organization should be “Return on Investment “…in this case the return is the health status of the client. Research organizations should not measure their success on the indicators that they develop but rather they should measure their success on how well they “use” these indicators to achieve their goals. Measures In the case of health care we want to know
This is marketing for the greatest return with the least investment. It calculates the client’s probability that he will not get the “illness” if he undergoes the treatment given by the health care professional if he responses to the promotion for him to undergo the treatment. In health care, profiling can be used to determine which client has the greatest likelihood of becoming ill with a specified illness. Profiling determines health care services or instructions that the client is likely to response to, and it determines that if the client responds what is his or her chance of not getting the illness.
In general, federal programs uses mass communication campaigns to attempt to change social behavior. For example, Mexico is conducting a major mass communication campaign to reduce tobacco use and sedentary lifestyles and to promote healthy eating habits. Not only are these campaigns marginally successful, they are expensive. Stakeholder InvolvementStakeholders attempt to control their investments too tightly. Most stakeholders want to have a strong ownership of any project development. and want to know exactly where and how their money is being spent. In order to do both of these, stakeholders must have full knowledge of the management direction of that project. It is expected that these stakeholders will continue to press for service monitoring to become increasingly focused on quality and outcome measures and multi-disciplinary packages of care. Such developments cannot be achieved without the use of sophisticated, integrated information systems. In order to minimize risks, detail information must be obtained both to make informed decisions on how to make their investments and also to monitor the out come of their investment. Lack of information increases risk and increases the desire to “control” the project. Market Share and "Subsidizing"
Increasing the role of private providers may increase the overall cost of government’s health care. If a private organization can make money, then why not the government. Governments in developing countries may need to look again at their role in health care. In the developed countries, health care organizations are doing every thing they can to increase their market share...and in developing countries where the government already controls the market, the government is trying to reduce their interest, i.e., attempting to increase the role of the private sector. In fact, what developing countries are doing is giving away the more "profitable" parts and having to keep the parts that no one else wants... This makes it more difficult for governments to generate sufficient revenues in order to become self sufficient.
An examination of the economics may show that governments in developing countries should maintain control of the health care system. By managing the overall health care system, governments may be able to effect economics of scale and reduce their overall costs. The excuse that government hospitals are not efficient and that privatization is more cost effective is not sufficient. That is a syndrome not the cause. It still does not improve the management of the government health care units (if truly they are operated less effectively).
Government health care policies are based on the distribution of costs across types of clients, types of providers, and type of services. Knowing the differences in these types is critical for policy makers in order to make informed decisions. However, unlike many suggestions, the government does not have to have only one solution. With proper analysis, governments can offer different options to different target groups. For example, for those that are willing to pay for good quality accommodations, then those services can be provided...at a premium price. For those who are unwilling to pay for the "better accommodations" and want only basic care, then those services can also be made available to those individuals. By collecting monies from those able and willing to pay for health care, governments will be better able to cover the costs of those that are unable to pay. These types of decisions require a careful and a complete analysis of all factors.
HMOs are also having a very difficult time in maintaining their services in an aging population. As the population ages (as most developing countries are now experiencing) the costs associated with health increases. HMOs may work well when the population is younger but as it ages, HMOs are unable to keep up with those costs. Again, governments may be better able to set back reserves for the aging of their population than many individual private for-profit organizations.
Health Care FinancingToo much emphasis is place on health care financing. While financing is very important to health care, it is only a medium of exchange, which “may be” converted into real health care resources or health services. If this financing is not converted to proper health care resources, increase financing does little good. Instead of collecting statistics on how much is spend by national governments...it is more important to know what services the financing was converted into. Although much is said of “how much money does the government invest in health care services,” most measurements only reference abstract indicators that give little indication of what this means to the individual client. These indicators say nothing about the ability of the lowest organizations to meet demand and to supply to the client what she or he needs. As an example, administration cost (the “leakage” of money from actual health care) is rarely calculated when comparing different financial strategies. It is only by measuring the success of these individual organizations that directly deal with clients that effectiveness of government expenditures can be measured. If the lowest level units are not successful in management, then no amount of government expenditures will be sufficient. By improving the efficiencies in the organization, health care coverage can be increased without increasing expenditures. Insurance is often spoken of as a means to increase equity. Insurance does nothing to increase equity (using our definition) but rather provides a “savings” system and provides protection against catastrophic events for those “who can afford to pay for the insurance.” Most poor do not have enough money for daily living much less for the purchase of insurance. It is suspected that Insurance may actually increase the inequities in the general health market. Insurance Companies solicit the healthier and richer of the population. Money is siphoned away from the general market and placed in health care organizations that create this market. In fact, what developing countries are doing is giving away the more "profitable" parts and having to keep the segment of the population that no one else wants. This makes it more difficult for governments to generate sufficient revenues in order to become self sufficient. Implementing fees is an approach that is often found in the literature for increasing the revenue for health care financing...but increasing the revenue is only one side of the flow of funds equation. If by increasing the fees changed and the demand for services decline, the actual flow of funds may decrease. Another side of this equation is that by increasing fees, the costs in treatment of the patient may increase (assuming that he doesn’t use the services as often and that when he is treated, he is sicker) …(see full discussion on the InHCc Web site). Government that are concerned with the efforts to expand health care services fear that it will cost more money and put further strain on an already hard-pressed governmental budget. If health care services are not expanded, the costs to the government could be exponential greater. There are two services that must be provided in order to have equitably economic access to health care services.
What you call the organizations that provide these two services really doesn’t matter. There is only so much money to go around; wither the funds for health care comes from the government collected through taxes or through insurance premiums and fees collected from the individual, the individual client ultimately pays and can only provide so much money for all these schemes. In the long run, it may not really matter what the source of funding is for health care. Risk Taking in the Market The risks of investments can not be determined. Insurance is often spoken of as a means to increase equity. Insurance provides an enforced system of “savings” that provides protection against catastrophic events for those “who can afford to pay or who can afford to put away their savings” for the insurance wither the insured is the individual client, the employer, or the national government. Insurance companies do create more equity between the sick and non-sick but they may actually decrease the equity between the rich and poor.
It is suspected that Insurance may actually increase the inequities in the general population. Insurance Companies solicit the healthier and richer of the population. Money is siphoned away from the general market and is placed in health care organizations that provide the insurance. In fact, developing countries are giving away the more "profitable" parts and having to keep the segment of the population that no one else wants. This makes it more difficult for governments to generate sufficient revenues in order to become self sufficient.
Insurance companies also create additional administrative overhead that siphons money from the total funds available for actual health care.
Insurance companies are reluctant to provide “fair” coverage because they do not have enough information to make decisions of risk or to determine their expected costs. If they do provide insurance coverage, their charges to the payer are generally inflated in order to ensure that they can cover all of their "unknown" costs. Insurance companies are reluctant to provide coverage in locations where they do not have sufficient information to make estimates of their risk or to determine their expected costs. If a insurance company does provide insurance coverage, their charges to the payer are generally inflated in order to ensure that they can cover all of their "unknown" costs. InHCc worked with several insurances companies that did not know for what they were reimbursing the providers of medical services. Data analysis showed that the providers where charging the insurance companies different prices at different times and charging different insurance companies different amounts for the same service. One insurance company’s policy on premiums was “if we have money left over at the end of the year, we will raise our prices only a little. If we do not have money left over at the end of the year, we will raise our premiums a lot. Without information, market forces cannot make informed decision. Without informed decisions, the market cannot operate efficiently. Donors are also reluctant to invest funds if they can not “monitor and evaluate” how those funds are used. It was estimated by one NGO that over one-half the cost and one-half the time of their accounting department was taken up with donor audits. It is a rule of thumb that 30% of the budget amount for a project should be on Monitoring and Evaluation. This is expensive for the donor and expensive for the project… leaving less money for health care of the individual. Benefits:
Critical Mass and Insufficient FundingInsufficient funds are being invested in projects. Very limited research has been directed to determine the “economics of scale” of operations. Not only is there insufficient technical information but there is insufficient knowledge on the part of the project developers. It is InHCc’s belief that there may be a "critical mass" that must be surpassed before any one project can succeed. Is this the reason that governments have been largely unsuccessful in many of their projects? An analysis of two clinics in Mexico by InHCc has definitely shown that there is a “best” size for a clinic (larger is better). Even those both clinics were operated by the same health organization and had the same physicians; the larger clinic was successful while the smaller clinic was not. This question arises in International Development where the trend is to use the “Strategy of Incremental Investments or Stepwise Investments.” In thinking that their risk is minimized, Donors prefer implementing development projects in small stages instead of using the "Big Bang" approach. These small investments may be too little to reach the critical mass needed to make these projects successful. Donors organizations also like to "spread the money around" for mostly political reasons. The idea is that they must spread it around in order to get wider support. This spreading around and funding many smaller projects at the same time may be destructive. Donors have debated this for years...however, what is different now is the ability to manage larger projects more effectively through the use of Information Systems. Whereas in the past it was impossible to collect sufficient data to manage a large project, that is no longer true. It may now be the time to make a change and rely on efficiencies and good business sense instead of politics to improve Health Care. Splitting and contracting“Splitting” refers to the creation of separate agencies to purchase and provide services, the former contracting with the latter on the basis of expected outputs rather than controlling it in a hierarchical way. “Contracting” includes not only public-public contracts, but also to the use of private firms or providers to deliver government services. While splitting forces purchases to be explicit about what they want from service providers and it helps purchasers hold providers to account, in principle improving efficiency; it requires strong management capacity and good information systems and can impose significant administrative costs, particularly for services where measurement is difficult. Contracting is only effective when outputs can be clearly specified and performance clearly measure (Bennett and Mills 1998). This also requires technical and administrative capacities that are weakly developed in many countries.
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