Impact of financial agreements in European chronic care on health care expenditure growth

- PFC appeared to substantially decrease outpatient expenditure growth.
- PFP has the strongest ability to tackle the growth of hospital expenditure.
- All-inclusive financial agreements decrease the growth of outpatient expenditure.
- Financial agreements are powerful tools to integrate care and control healthcare expenditure growth.
- A blended payment scheme is likely to control healthcare expenditure growth the most.

Various types of financial agreements have been implemented in Europe to reduce health care expenditure by stimulating integrated chronic care. This study used difference-in-differences (DID) models to estimate differences in health care expenditure trends before and after the introduction of a financial agreement between 9 intervention countries and 16 control countries. Intervention countries included countries with pay-for-coordination (PFC), pay-for-performance (PFP), and/or all inclusive agreements (bundled and global payment) for integrated chronic care. OECD and WHO data from 1996 to 2013 was used. The results from the main DID models showed that the annual growth of outpatient expenditure was decreased in countries with PFC (by 21.28 US$ per capita) and in countries with all-inclusive agreements (by 216.60 US$ per capita). The growth of hospital and administrative expenditure was decreased in countries with PFP by 64.50 US$ per capita and 5.74 US$ per capita, respectively. When modelling impact as a non-linear function of time during the total 4-year period after implementation, PFP decreased the growth of hospital and administrative expenditure and all-inclusive agreements reduced the growth of outpatient expenditure. Financial agreements are potentially powerful tools to stimulate integrated care and influence health care expenditure growth. A blended payment scheme that combines elements of PFC, PFP, and all-inclusive payments is likely to provide the strongest financial incentives to control health care expenditure growth.