PERFORMANCE PAYMENT IN TURKISH HEALTH SYSTEM



DRAFT

PERFORMANCE MANAGEMENT POLICIES OF HEALTH SYSTEMS IN TURKEY AND ENGLAND:

A CRITICAL COMPARATIVE REVIEW

Dr. Pinar Guven-Uslu[1]

Dr. Gulbiye Yenimahalleli Yasar[2]

ABSTRACT

The aim of this study is to investigate and critically review newly implemented performance management policies of the Turkish Health System following the publication of ‘Health Transformation Programme-HTP’ in 2003. The critical review includes some comparisons with performance management of the English National Health Service (NHS).

The HTP (Ministry of Health-MoH, 2003) policy document is expected to bring fundamental changes to how the system is managed and how services are delivered. Important policy changes included the introduction of organisational performance metrics and associated financial incentives, hospitals gaining autonomous business organisation status so that MoH does no longer appear as the provider of health services, the introduction of a family-medicine-scheme managed by the MoH and, finally, the introduction of a general-health-insurance-system which does not provide universal coverage.

The paper compares organisational aspects of performance management in the HTP to that of the NHS in England and concludes that there are some fundamental differences in terms of the management of performance at provider organisations, process of target setting, calculation of performance metrics and influences on Government funding mechanisms. Excessive private sector provision and inequalities in health service delivery are seen as the main reasons for these fundamental differences. These reasons are considered important because they provide insight to understand some of the issues about the introduction of competition to the health service market in England and contribute to the international dimension of this debate.

Introduction

New Public Management (NPM) has influenced a number of public policy changes around the world and has brought about increasing demands on health care organisations to deliver improvements on outcomes measures which are defined and directed by central Governments. The methods and approaches to direct, control and measure performance of health care organisations are diverse and numerous, ranging from management control systems to various organisational incentives (Walshe and Smith, 2006). In this paper we are looking at recent policy changes around performance management in the Turkish health care system with the aim of making comparisons with English health service management. Our purpose here is to understand the differences and similarities so that areas for future empirical research could be identified. This approach also helped us to speculate on some of the medium and long term implications of a number of performance management related policies for both health care systems.

The paper has the following sections: the first part is an introduction to the theoretical approach adapted in this paper. We then present review of official policy documents that introduced reform programmes in health services in Turkey. This is followed by a summary of main aspects of reform in English Health Service since 1997. In the section following that; a comparison with help of theoretical framework adapted is presented between these two health systems. The paper concludes with critical comparative components of contextual factors of change in implementation of reform programmes in health services.

Contextualist Approach to Change

Contextualist understanding of change refers to examining processes of change within a historical and organisational context (Johnson, 1993, p.58). As stated by Clark et. al. (1988) this approach is often multi-disciplinary. It draws on a range of perspectives and methods such as the business historian, the corporate strategist and organisation theorist (Whipp et. al., 1987). It is also concerned with a detailed examination of the process of organisational transition (Child & Smith, 1987). In a study of strategic change and competitiveness, Whipp et al. (1987) argue that it is important to examine content of a chosen strategy, the process of change and the context in which it occurs.

Pettigrew also draws attention to the difference between context and environment. He argues that; any view which considers the workplace as operating in a business environment as opposed to operating within a larger society, or context, is of little use either academically or practically. Because in this way, it would fail to capture the complex relationship between constraints, and the choice between continuity and change. He argues that the notion of environment is a much less dynamic phenomenon than the notion of context. Therefore, in understanding change management in large organisations, environment effects as opposed to contextually sensitive effects would miss many of the key dynamics of organisations and changing. Pettigrew also puts a great deal of emphasis on theory. Theory, according to him, is the engine, which drives our understanding of change. We should endeavour to deploy theoretical models, which can embrace the ideas of contextualism and processualism. He (1987) further clarifies the contextualism with the need for vertical and horizontal levels of analysis. The vertical levels of analysis are taken to outer (i.e. environment) and inner (i.e. interest group behaviour) contextual factors. The horizontal level refers to the temporal interconnectedness between future expectations, present events, and historical accounts. Research which is able to combine a processual analysis of change with an inner and outer organisational analysis of context is defined as contextualist: "An approach that offers both multi-level and horizontal analysis is said to be contextualist in character" (Pettigrew, 1987: 656).

The theoretical framework of Pettigrew et al. (1992) study lies in the interdependent exploration of content, process and contexts. In their three dimensional model context refers to the ‘why’ and ‘when’ of change. This also covers the influences from both the outer context like economic, social and/or political events and the inner context of specific organisations. Content is the ‘what’ of change and process is the ‘how’ of change. Process involves examination of how, and by whom change is formulated and managed, and what patterning occurs in this activity. All these three dimensions are also linked closely to the time dimension which brings a dynamic and changeable potential to this structure itself. The inner and outer context of change is the main focus in order to see the patterns in the way that strategic change occurs. A good focus for this analysis necessitates a distinction between receptive and non-receptive contexts for change. By the term ‘receptive context' they refer to the features of context (and also management action) that seem to be favourably associated with forward movement. The non-receptive contexts are associated with blocks on change. They also state that there is no social science research explaining rates and pace of change by using the language of receptivity and non-receptivity. However, they also say that there is an emerging literature which not only seeks to connect features of context and action to rates of adoption and change, but then posits a relationship between capabilities to change by learning from differences in competitive performance of firms (Smith and Grimm, 1987; Pettigrew and Whipp, 1991).

Pettigrew et al. (1992) mentioned that there is not a strong social science tradition of theorising about receptive contexts for change. There are not either many empirical studies in organisations seeking to describe different aspects or comparisons about contexts of change. Their study concentrates on why the health districts in UK facing similar environmental and policy pressures behave at times similarly and at times differently in achieving outcomes.

In this paper, we compare these three dimensions of change, namely content, process and context in two countries change programmes in managing health services. We anticipated that there will be similarities and differences in both contextual factors and organisational approaches to change programmes. Our aim is to highlight areas of critical importance for future empirical comparative studies.

Performance management related changes in Turkish health care system

Turkey used to run a nationalised health system so-called “socialisation of health services” with holistic approach during the five decades. The system tried to establish community-oriented, accessible, comprehensive, longitudinal and multi-disciplinary team based primary care services. It was also contemporary, flexible, and open to be updated and was supported strongly by health professional organisations, the universities and the people. However it was faced with serious problems due to the lack of interest of the health authorities and politicians for the resources and facilities to be adapted to the needs of the rapidly changing and urbanising community. Thus, Turkish health system entered to the eighties with various problems (Aksakoglu, 2011; Yavuz, 2011).

The coup d’état in 1980 introduced structural adjustment and market-oriented reform policies for Turkey. Turkish health care system has been experiencing neo-liberal transformation since then. Reform proposals of the 1990s focused on the introduction of a general health insurance (GHI) system, decentralisation, introduction of a family medicine scheme, purchaser-provider split, contracting out, quasi-markets, and improvement of management information systems (Ministry of Health – MoH, 1993).

Subsequent attempts to realize these reform proposals have been made by the conservative Justice and Development Party (JDP) with the announcement of its “Health Transformation Programme” (HTP) policy document in 2003. The HTP announced the central objective of the reform as ‘establishing a high-quality and effective health system which everybody can access’. The main principles are as follows: human centrism, sustainability, continuous quality improvement, participation of all stakeholders, reconcilement, volunteerism, division of power, decentralization and competition in service (MoH, 2003). According to the Organization for Economic Co-operation and Development (OECD) and the World Bank (WB), the HTP is designed to address long-standing problems in the Turkish health sector, namely: i) lagging health outcomes as compared to other OECD and middle-income countries, ii) inequities in access to health care; iii) fragmentation in financing and delivery of health services, which contributes to inefficiency and undermining of financial sustainability; and iv) poor quality of care and limited patient responsiveness (OECD-WB, 2008: 44).

The HTP aims to achieve a transformation in the framework of eleven themes:

1. MoH as planner and supervisor,

2. GHI gathering all people under a single umbrella,

3. Widespread, easily accessible and friendly health system,

a) Strengthened primary health care services,

b) Effective and graduated chain of referral,

c) Administratively and financially autonomous health enterprises,

4. Knowledge and skills-equipped and highly-motivated health service personnel,

5. System-supporting educational and scientific bodies,

6. Quality and accreditation for qualified and effective health care services,

7. Institutional structuring in rational drug use and material management,

a) National Pharmaceuticals Agency,

b) Medical Devices Agency,

8. Access to effective information in decision-making: Health Information System (MoH, 2007a:277).

9. Health promotion for a better future and healthy life programmes,

10. Multi-dimensional health responsibility for mobilizing parties and inter-sectoral collaboration,

11. Cross-border health services to increase the country’s power in the international arena (Akdag, 2009).

Assessments of the HTP show that despite some improvements, the HTP remains far from reaching its ultimate goals; defined as improvement in health status, financial risk protection and satisfaction with health care fully. Therefore, Turkish people continue to face low health status and a low level of financial risk protection (Yenimahalleli Yasar, 2010). In addition assessments according to the intermediate performance characteristics/goals such as efficiency and quality which can serve as guides for evaluating performance (Roberts et all, 2004) also show that performance of the HTP is very poor (BSB, 2011).

In line with the fourth component of HTP namely ‘knowledge and skills-equipped and highly-motivated health service personnel’, a performance-based supplementary payment (PBSP) system was introduced in MoH hospitals in 2004. It was initially piloted in ten hospitals in 2003 and subsequently expended to all MoH health facilities including primary health care. Currently, all 850 MoH hospitals and primary health care facilities have in place the PBSP system (OECD-WB, 2008:49). In 2008 there were 1.350 hospitals; 847 of which MoH hospitals, 57 of which university hospitals, 400 of which private hospitals and 46 of which other hospitals in Turkey. There has been a rapid increase in the number of private hospitals during the HTP period. Between the 2002 and 2008 the number of private hospitals increased 48%, rising from 270 to 400 (MoH, 2010:43), between the 2002 and 2011, 81% rising from 270 to 490 (Sonmez, 2011:73).

Social Security Institution (SSI) has been contracting with private facilities for the delivery of outpatient and inpatient health services. Despite the rapid increase in private sector provision there is very limited regulation of the market. For example the payment mechanism for private hospitals has not been defined yet. Moreover the Social Insurance and General Insurance Law allows “extra billing”, which are to be paid by patients on an out-of-pocket-payments, by private providers, whereby, based on detailed criteria adopted by the Council of Ministers, private providers were allowed to charge up to 100% above the price paid by the SSI. Recently SSI has limited this amount up to 30% above the price paid by SSI. It is very difficult to have a control over prices charged in the private sector although the Reimbursement Commission established in 2004 determined a regulated price list for all health service clinical activities reimbursed by SSI. The calculation of list prices is performed annually by a Reimbursement Committee at the SSI. It is then published and distributed via Health Budget Law but the process of calculation is not public information (OECD-WB, 53).

It will be useful to have a look briefly the reforms of MoH hospitals in Turkey before starting discussions on PBSP system.

Reforming MoH hospitals in Turkey

The third component of the HTP aims to create administratively and financially autonomous health enterprises. In line with this component all public facilities (with exception of university hospitals and health facilities belonging to the Ministry of Defence) have been integrated under the MoH in 2005 before the establishment of autonomous hospitals. Accordingly the Social Insurance Institution (SII) hospitals transferred to the MoH in 2005 in order to harmonize management and payment mechanisms across all public hospitals and to pave the way towards autonomy for hospitals. A pilot hospital autonomy law was drafted in 2007 setting out the principles of hospital governance based on a public enterprise model, whereby hospitals joining the pilot project would be managed by boards, but remain affiliated to the MoH. The law offers the possibility of the creation of a joint hospital union at the regional level. The hospital union would be a network of hospitals that would jointly undertake programme planning, budgeting and implementation. Pilot hospital unions would have greater autonomy and flexibility over hiring health personnel, who would no longer be classified as public employees with the right to life-long employment, and resource allocation decisions. The MoH would be responsible for guaranteeing quality of care and adherence to MoH standards in hospital unions (Yenimahalleli Yasar, 2010).

The implementation of hospital autonomy has not been accomplished yet. Only selective hospital reforms were implemented with the objective of giving public hospitals more autonomy and flexibility to carry out the service delivery function within an accountability framework emphasizing quality, efficiency and effectiveness of care: (i) granting hospital managers more autonomy and flexibility over the management of revolving funds, as well as procurement and investment decisions; (ii) implementation of a performance-based supplementary payment (PBSP) system; (iii) outsourcing of hospital clinical diagnostic services to the private sector; (iv) upgrading health information systems and (v) implementing hospital quality and efficiency audits (OECD-WB, 2008).

Objectives of the PBSP system in Turkey

Contrary to believe, the HTP claims that there is a shortage of both physicians and nurses in Turkey. Therefore, the PBSP system has aimed to encourage job motivation and productivity among public sector health personnel. According to MoH at the time of launch the PBSP system, the ratio of health personnel to population was lower than in other middle-income and OECD countries, the majority of public doctors worked part-time and doctors preferred to work in the private sector. As a result, there were long queues in public hospitals, long waiting times to see a doctor and low patient and provider satisfaction with the health system. The hospital referral system was not operating efficiently and therefore this also resulted in patients going to hospitals directly and waiting for long hours to be seen by a clinical professional. The PBSP system was considered a key intervention to address these problems.

Another important objective is to improve performance of the MoH hospitals, focusing on quality of care, efficiency and patient satisfaction (MoH, 2008:45; OECD-WB, 2008:49).

Historical development of the PBSP system in Turkey

The PBSP system in Turkey can be examined under three phases: (a) Before 2004, (b) PBSP system in 2004, and (c) Quality Improvement and Performance Evaluation System from 2005 onwards.

a) Before 2004:

The works and procedures on revolving budgets in the institutions affiliated to the MoH were arranged by the law dated 04.01.1961 and numbered 209. This law was amended by the decree law dated 30.06.1989 and numbered 375, and the staff working in the institutions with revolving budgets started to get payment from the revenues of revolving budgets. In accordance with the amendment, the “Directive of Supplementary Payment” determining the procedures and principles of payments, was prepared and put into force on 30.01.1990. This directive underwent various amendments until 2004 without making any changes in the main criteria, and then it was abolished completely and new directives on supplementary payment with similar criteria were put into force.

The major features of the supplementary payment system before 2004 are:

a. Supplementary payment is paid to the personnel who work in hospital being subjected to the regulation on staff. Outsourced staff working in the services such as cleaning, security, data entry into computers and catering do not benefit from supplementary payment.

b. Gross supplementary payment amount of personnel is the multiplication of top supplementary payment amount, performance point percentage, rate of contribution time to the payment term, and the percentage of financial status. Gross supplementary payment amount does not exceed the amount of top supplementary payment. The remaining amount after deduction of income and stamp tax from the amount of gross supplementary payment is the net supplementary payment amount to be paid to the staff.

c. This supplementary pay system is a premium system which does not affect the fixed salary of the staff, and it covers the payment made in addition to it, however, there is no effect of fixed salary of staff on determining the amount of supplementary payment which they will take. As a result of multiplication of the total of personnel’s salary (including supplementary indication) and the side payment and any compensation, with top supplementary payment rate, you calculate the staff’s top supplementary payment amount. Top supplementary payment rate is applied as 100-120% for doctors, and 80% for other staff. And the total of the whole personnel’s top supplementary pay amount gives top supplementary payment amount.

d. Personnel’s performance point percentage, which is the mathematical expression of personnel’s performance evaluation is performed by two superiors of personnel – in order of superiority – separately based on the criteria of knowledge and capability of personnel related to the work they are doing, their attendance, discipline and quality of work, capability of working independently, capability to use initiative and organize the assigned work, effort to develop himself, attitudes and behaviours towards superiors and co-workers, contribution to the development of works performed by their unit, difficulty and risk of work; and then an arithmetic average is calculated. Shortly, in this supplementary payment system, performance evaluation is evaluated subjectively by the superiors of personnel according to the criteria, and it has no relation with the amount of output produced by the personnel (Tengilimoglu et al, 2008:32-33).

(b) PBSP system in 2004:

In 2004 the system was piloted first to facilitate the adaptation of health care professionals and facilities to the new system and this paved the way for inspections and audits to sustain the measurement of performance. Considering the changes and experience, a limited number of quality criteria, easily measurable in domestic conditions, were tested and the most eligible ones were put into practice in the year 2005. By these smooth changes, it is aimed to elevate the consciousness about providing high quality health care and to motivate the infrastructural organisational settings (MoH, 2008:45).

(c) Quality Improvement and Performance Evaluation System from 2005 onwards:

The MoH has also introduced some elements of “internal markets” whereby the MoH Performance Management and Quality Improvement Unit implements a pay-for-performance scheme in MoH hospitals, linked to institutional performance criteria.

Management of performance at provider organisations

Essentially PBSP is an additional payment that health personnel receive each month in addition to their regular salaries. The base salary is paid from the MoH line item budget (under health personnel salaries). The performance-based payments are paid from the revolving budgets that are financed mainly from the general insurance system. The supplementary payment is paid to the personnel who work in the hospital being subjected to the regulation on staff too. Outsourced staff working in the services such as cleaning, security, data entry into computers and catering do not benefit from supplementary payment as in the case of pre-2004.

There are several factors that determine how much health personnel will receive as performance-based payments. First, the total amount that health facilities can allocate to performance-based payments to health personnel is capped at 40% of revenues. Some hospitals may choose to allocate less than the 40% depending on other needs in the hospital (for example, if laboratory equipment needs to be upgraded or the hospital needs to hire more auxiliary health personnel). The hospital management is responsible for deciding how much will be allocated for performance-based payments within the limits defined by the MoH. Moreover, individual bonuses for staff are capped at a certain multiple of basic salary. This means, for example, that a specialist earning TRL 1 000 per month in basic salary can receive a maximum bonus of TRL 7 000.

Second, this total (capped) amount is subsequently adjusted based on the institutional performance of the health centre or hospital. Every health centre and hospital is given a score from 0-1 based on institutional performance indicators and the performance-based bonuses are multiplied by this factor. For example, if a hospital wishes to devote 40% (the Capped limit) to staff bonuses, and its institutional performance score is 0.8, then in reality only 32% can be devoted to staff bonuses. This places a high premium on good institutional performance and balances in the individual incentives for high service volume with group incentives for overall institutional quality. The MoH has established five categories of indicator to measure the institutional performance of hospitals, each of which carry equal weight. These indicators largely target the structural quality of care and patient and provider satisfaction. The five categories include: i) access to examination rooms, ii) hospital infrastructure and process, iii) patient and caregiver satisfaction, iv) institutional productivity (bed occupancy, average length of stay), and v) institutional service targets (caesarean-section rate, share of doctors working full-time, surgery points per surgeon and per operating room, and the reporting of scores for the performance monitoring system to the MoH). Third, an individual-level performance score is calculated for each staff member. This score is used to determine how the aggregate amounts of bonus payments for a hospital are distributed across individual health workers.

For physicians, the individual performance score depends first on the number of procedures performed by that staff member. Each clinical procedure carries a particular point level that is determined by the MoH. The total points score for a physician is then adjusted by a job-title coefficient that is meant to measure workload aside from providing clinical care for different types of doctors (i.e. administrative duties, teaching, etc.). This adjustment varies only by job title not by individual. The score is also adjusted by the number of days the person has worked in the year. The score is adjusted depending on whether the person is employed full-time or part-time in the hospital. The current co-efficient for full time status is 1 but for part-time status is 0.4. This adjustment was put in to encourage full-time practice in public hospitals and discourage “moonlighting” in the private sector.

Process of target settings

In 2004 and 2005, within the context of the directive, the applications which are provided by the sub legislation has been changed and developed continuously considering the feedback, inspections and the results which were observed from the field. The basic principles which make the main framework include: providing more productive and qualified health care; motivating the preventive health care services; scientific studies and the training ships of specialists; improving staff distribution; greater rewards for staff who work in areas of multiple deprivation and in incentive and risky units, and promoting full-time working at public health-sector establishments. In this period, a permanent legal infrastructure has been set. For this purpose, additional clauses were added to the 5th article of the Law About Supplementary Payment Which Would Be Distributed To The Institutions and Rehabilitation Establishments Affiliated To The Ministry Of Health No: 209 by the Act which was passed in March 2006 and No:5471 (see the publication in Turkish Edition for details, Ministry of Health, 2006a). Consequently, depending on 49 this rearrangement of law, Regulation Regarding Making Supplementary Payment From Revolving Fund Proceedings To Health Staff Who Works Within The Ministry Of Health Institutions And Establishments has been issued (see the publication in Turkish Edition for details, Ministry of Health, 2006b). In this way, a firmer foundation for the policies has been achieved and the argument and public speculation about the permanence of these policies has been resolved (MoH, 2008:48-49).

Commissions, which are set up in provincial health directorates for primary care facilities and at hospitals, with the participation of representatives from different professions, determine the amount of contribution payment to the personnel by considering the income-expense balance, debts, credits, fiscal status and needs of the institution. Thus, participation of different groups and levels in hospital management is encouraged and the capacity of at-site administration is promoted (MoH, 2008:47)

As for health care services given in primary health-care facilities, various factors such as the follow-up of infants, the care of pregnant women, the number of vaccinations, new-born scanning tests and the use of modern family planning methods are also used as performance criteria. Thus, preventive health-care services are also awarded and encouraged. (MoH, 2008:48).

At training and research hospitals, additional scores are given to clinic chiefs, deputy chiefs, chief interns and specialists providing that they make publications of a definite number. Clinic chiefs and deputy chiefs at training and research hospitals are also given additional scores providing that they give certified theoretical and practical training of a certain level. Thus, uncompetitive performance criteria are used in the field of scientific publications and specialty training (MoH, 2008:47).

Based on distance of primary care facilities from city/town centers, facilities such as transportation and whether they are located in villages, towns, districts or city centers, onsite classification is made and so a discrepancy is formed, and in return for working in deprived regions, higher premiums are given. (MoH, 2008:48).

The individual-level performance implementation does not measure financial performance directly. However, the monetary value of calculated scores remains quite alike to the monetary surplus value which is created by the institution that month. For this reason, this implementation indirectly influences financial performance, such as decline in per unit costs, saving in current expenditures, check of the patient’s hospital admission date and increase in the investment in curative devices and infrastructure (MoH, 2008:47).

Models and calculation of performance metrics

PBSP system is being implemented in 3 different models as primary healthcare institutions, state hospitals and research and training hospitals in Turkey. In the first model, there are application principles and procedures towards primary health care services. This regulation has been prepared taking into account the treatment and protective health care services depending on the nature and structuring of primary health care services, as well as the issue of service provision in rural areas. For primary level establishments, protective health services scores and regional administrative scores increasing towards the total area have been defined in the regulation in addition to the criteria related to treatment health services.

In the second model, 2 models pertinent to state hospitals and training and research hospitals have been defined. While both models have similar aspects, there are certain different application principles. The practice in Training and Research hospitals is based on clinics, and has been modeled taking into account the training and PBSP System scientific studying issues. One of the main components of the system is scoring 5120 medical processes being performed in health institutions by determining their relative values. Among these processes, those which are personally finalized by practitioners with their mental and physical professional contribution from the beginning to the end have been scored (For example: examination, surgery, intervention processes etc.). Processes performed by devices and auxiliary health staff were not scored, even these were under the responsibility of practitioner (for example: injection, laboratory processes etc.).

For state hospitals scores of all processes performed by the practitioners each month are added to measure directly their individual performances. Taking into account the days on which they work, the arithmetic mean of performance scores of all practitioners working in the hospital is used to determine the performance score average of the institution for that period.

Finding performance score average of the institution

PBSP system coefficients of hospital managers, laboratory branch practitioners and other health staff determined taking into account such elements as their titles, tasks, working conditions and duration, and whether they work in risky departments, are multiplied by the institution performance score average to determine their (indirect) individual performance scores. Individual performance scores of all staff (direct or indirect) are multiplied with such parameters as self employment coefficient, number of active working days, and staff title coefficient, and net performance scores are determined by adding the additional scores which they were awarded when they were performing different tasks such as tender and purchase commission.

Calculation of net performance score

Points X Coefficient of Cadre Title Per Each Staff Member X Active working days Coefficient X Self employment coefficient X Additional score = Net Performance Score

Particularly the self employment coefficient, which is determined according to whether the practitioners perform their profession as self employed has a significant effect on the net performance score. While this coefficient is 0,4 for those who are self employed, it is set as 1 for practitioners working in public sector. This coefficient has been decreasing gradually from the year in which the system was started up to now. The purpose behind this is to encourage the practitioners to work only in public sector on the basis of volunteerism.

In this manner, the direct performances of clinic practitioners are measures, whereas indirect performances of managers, laboratory branch practitioners and other staff. In addition to this, by means of rewarding and deterring elements existing in the system, the net performance score indicated above is decreased or increased.

Scores of the staff are multiplied with a monetary coefficient determined each month, and the amount of supplementary payment they will receive depending on their performances is determined.

Monetary coefficient is expressed in the system as period supplementary payment coefficient. Period supplementary payment coefficient is determined by the revolving capital commission by dividing the amount decided to be distributed in that period to the sum of net performance scores of all staff (MoH, 2008: 65-68).

Assessment of Institutional Performance

At the beginning of 2005, the concept of “developing institution quality and institution performance” was taken to the agenda, and thus a new dimension was presented to the practice. In this frame, the answer of the question “How is hospital performance measured and monitored” in terms of monitoring the works for improving hospital services was tried to be given by analyzing the World Health Organization European Office reports and the country analysis where this is applied. Initially part of Institution Performance measurement concept and methods was used, and “Ministry of Health Inpatient Treatment Institutions Institution Quality Development and Performance Assessment Directive” was prepared and put into force.

Consequently, the directive has been changed and updated with the name “Improving Quality And Performance Evaluation Instruction In Institutions Agencies Affiliated To Ministry Of Health”. The set of new criteria has taken place not only for the 2nd and 3rd level but also for the primary care healthcare establishments for providing healthcare services within the directive.

The Directive has collected the institution performance measurement methods under six topics:

a- Coefficient of Access to Examination

b- Coefficient of Assessment of Hospital Infrastructure and Some Processes

c- Coefficient of Questionnaires for the Patient and Their Caregivers’ Satisfaction

d- Coefficient of Institutional Productivity (including Coefficient of Establishment (Primary Care Healthcare Units Productivity)

e- Coefficient of Institutional Targets

Consequences of PBSP System in Turkey

Impact on utilisation of resources

According to a research the general efficiency of hospital has been increased (the increase in total revenue of the hospital, and per day, in consultation per doctor, in the number of hospitalization per doctor and in the ration of capacity utilization has been seen) after the implementation of PBSP system in Turkey. However, it is also determined that supplementary PBSP system leads to unnecessary resource utilization (increase in the length of stay in the hospital, unnecessary tests per patient, number of procedure, and increase in the expenditure of the treatment) (Tengilimoglu, Pay, and Kisa, 2008).

Impact on satisfaction and motivation of health personnel

According to a recent survey done by MoH, the level of motivation of health system after the PBSP system is still low. The main problems are the deduction of the additional payment while on leave, the existence of big differences between the professions, and the perception of uncertainty concerning the future of the additional payment (MoH, 2010: 43).

On the other hand, according to a survey done by Turkish Medical Association (TMA) there are a number of negative reactions to the PBSP system from health professionals, due to its creating competition among health professionals and a resulting erosion of teamwork. In addition, medical education is affected negatively since university hospitals became reluctant to admit complex patients and academic staff began to work at outpatient clinics in order to gain greater bonus payments. The PBSP system also encourages partisan behaviour (TMA, 2007).

A study which was designed to investigate Ankara Education and Research Hospital personnel’s perceptions/reviews of PBSP system shows that there are some significant differences among personnel’s review about PBSP system in terms of gender, education status, vocations and departments. The health personnel found this system is unjust because of both the imbalance of fee rates between the doctors themselves and doctors with other personnel (Gazi et al, 2009).

Impact on health services

According to a research which investigates the effects of the PBSP system on primary health care in Bursa shows that there had been some differences in health care quantities before and after the PBSP system. As an example; while examination and laboratory study numbers had increased, the ratio of referring had decreased. Besides, infant mortality rates had decreased, risk groups’ mean follow up rates had increased. In general, these differences have to be seen positive in terms of health care. But, because of the structure of the system, to have a judgement about the quality of the care is impossible. The study concludes that if care has been evaluated not only in terms of quantity but also quality, beyond the desired, there had been some unfavourable returns of the system. For that reason leaving the system or to restructure is thought to be appropriate (Kizek et al, 2010).

Future Problems in Performance Based Payment

There are two potential affects of the performance-based system on quality and efficiency: possible decrease in returns and unknown future. Current performance based-payment may lead to decrease in return in terms of efficiency and quality earnings. Performance is assessed on the basis of increases or decreases in activity compared to the previous period, for example the number of child monitoring visits or number of referrals. If the existing levels are comparably low (high), there may be initial acquirements and also the potential of improvement will decrease as the performance approaches its potential ceiling (bottoms). MoH thus may not assess the efficiency and quality acquirements as the initial progress towards the future of the same size (MoH, 2007b:38-39).

An Overview of Strategic changes in English National Health Service since 1997

England’s National Health Service (NHS) has embarked on an ambitious program of system reform following the election of Labour Government in 1997. Since the establishment in 1948, NHS provided universal coverage with effective cost containment practices. By 2000, per capita health spending in UK ($1,813) was less than France ($2,387), Canada ($2,580), Germany ($2,780) and US ($4,540) according to OECD documents (OECD, 2003)

As a consequence of this, the infrastructure in UK health service provision was old and far from adequate in terms of latest technology equipment, with relatively less clinicians per 1000 population (2 per 1000) compared to US (2.8/1000), France and Germany (3.3/1000 population) (OECD, 2003)

Long waiting lists for routine surgery were in the headlines of British media for long time prior to 1997 indicating undersupplying of health care.

Labour Government decided to increase public funding to health service dramatically so that middle class citizens would not tend to purchase private health care impacting the public service NHS to become a safety net for those that could not purchase their way out of the system.

UK taxes therefore increased by about 7.4% in 2003 with a 43% increase in real terms to UK health spending from 6.8% of GDP in 1997 to an estimated 9.4% in 2007-8 reaching upper end of current European levels (Wanless, 2002)

A set of strategies were introduced by the Government. On the provider side, supply of health professionals were increased by increasing medical school intakes and supporting these through government grants and funds. To modernise the infrastructure a new type of contract ‘private finance initiative’ was introduced where public hospitals were rebuilt by private consortiums and Government paid a premium over longer terms. Continuous learning and improvement environment was promoted through sharing of information and knowledge between providers. On performance management, national standards and targets were introduced and a health technology appraisal agency, National Institute of Clinical Excellence (NICE) was set up issuing recommendations on services provided in NHS organisations. Performance information was published covering financial , quality, waiting time indicators. On the basis of these and related data, the independent health care inspection directorate awarded each NHS provider an annual star rating of zero to three stars.

This approach to performance management, seemed to provide a mechanism for change in providers attitude but a considerable amount of controversy has surrounded the indicator selection, the extent to which ratings should reflect absolute or relative performance and the degree to which they should measure managerial or patient level outcomes.

Another set of reform strategies were around the issues of active purchasing. 75% of NHS funding directly spent by about 300 local PCTs that are capitated single payers. There was introduction of patient choice which was traditionally never been the case in NHS. This strategy suggested to offer patients a choice of any provider –public, private or not for profit- which accepts the new NHS tariff rate.

The tariff system is based on an average price per treatment calculated as a national average. This is an extension of modified DRG based, activity related hospital payment system used in USA (DoH, 2004)

This funding system has direct impact on organisational performance measurement as one of the key performance metrics for organisational success is to have a balanced budget. For that reason, in that system hospitals aimed to provide service at a cost not higher than the tariff price but also provide as many treatments as possible to increase throughput and therefore income.

At later stages of these strategies the Government was stimulating a more mixed economy on supply side to expand capacity and offer increasing choice. GP consortiums, as free standing surgical centres run by international private operators under NHS contract, were foreseen and started to be formed as a first step change. Private diagnostic and primary care services were also being considered to be offered.

These changes implied and of an era of ‘English NHS ‘exceptionalism’ as sole provider of health services in the country.

In this paper we focus on current state of affairs and decided not to speculate on recently announced White paper of the newly elected Coalition Government.

Performance Management Changes in English National Health Service

Since the publication of ‘The New NHS: Modern and Dependable’ white paper (DoH, 1997), the UK’s National Health Service (NHS) has undergone considerable structural reorganisation. This was a ten year programme that aimed to provide ‘the best healthcare in the world’ (DoH, 1998). Cost and service quality improvements were expected to be achieved through greater collaboration and partnership, benchmarking and the implementation of performance related management. The annual publication of ‘league tables of hospital efficiency’, however, allowed direct cross-organisation comparison on the basis of cost alone and this, therefore, was inclined to shift priorities towards cost of care at the expense of quality of care (Jones, 2002). In order to address some of these critics, the Government then introduced the ‘star rating’ system to measure organisational performance of hopsitals with first wave implementaiton in 2002-03. This was a multi-dimensional measure combining financial and non-financial performance measures that are defined by the Department of Health. It was an adoptation of a balanced score card approach (Kaplan and Norton, 2001) with an expectation to combine financial outcomes such as balanced budget, with patient satisfaction outcomes such as 4 hours waiting times to be seen at an Accident and Emergency Unit, or hospital cleanliness etc. Each defined area of performance had a centrally determined target to be achieved by hospitals. The policy was introduced to acute hospitals to be rolled over to other types of hospitals such as mental health, community hospitals etc in time.

The NHS performance ratings system placed NHS hospitals in England into one of four categories:

➢ trusts with the highest levels of performance are awarded a performance rating of three stars

➢ trusts that are performing well overall, but have not quite reached the same consistently high standards, are awarded a performance rating of two stars

➢ trusts where there is some cause for concern regarding particular areas of performance are awarded a performance rating of one star

➢ trusts that have shown the poorest levels of performance against the indicators or little progress in implementing clinical governance are awarded a performance rating of zero stars

Where a trust has a low rating based on poor performance on a number of key targets and indicators, it meant that performance must be improved in a number of key areas. A zero star trust is one which either fails against the key targets or is considered to have poor clinical governance. The star rating system was also criticised for signalling confusing messages; for example one organisation. The Government's purpose in introducing star ratings was to lessen variation in performance between trusts, raise standards, and make services more accountable to the public.

On the first count - the attempt to reduce variation - this year's results indicate that the policy has failed in two health-care sectors. In acute trusts and ambulance trusts the gap between the best and worst performers has widened. There were seven more top rated acute trusts and two more zero star rated trusts than last year. Among ambulance services five more were awarded zero stars and two lost their three star rating. However, in specialist and mental health trusts the gap between good and bad narrowed, with more units ranked among the higher stars and fewer in the zero category.

The system was abolished in 2004 and was replaced by a new system of annual health checks. Some of the main performance indicators remained but the philosophy behind centrally rating of performance, ranking of organisations according to that calculation and publication of these rankings in public domain started to change. The Healthcare Commission replaced the Commission for Healthcare Improvement in March 2004 and introduced the annual health check with a belief that "health checks" can be used to provide an annual report on each health care organisation. This was a self declaration by hospitals on their organisational performance. A number of trusts randomly selected would be audited to assess whether they had made a fair declaration of their organisational affairs.

Around the same time in 2004, the Foundation Trust concept was introduced to the NHS. NHS foundation trusts are a result of the Government’s drive to devolve decision making from central to local organisations and communities. The introduction of NHS foundation trusts represents a profound change in the history of the NHS and the way in which hospital services are managed and provided. Foundation Trusts have been assessed as performing as expected by the Government according to targets set for them. Some of the requirements to become a foundation trust were; balanced budget (no deficit), have and operate a performance management framework, meet national clinical targets such as A&E waiting time of 4 hours.

The foundation trusts have the freedom to use their surplus in their preferred ways. They are regulated by an independent body Monitor. The requirements to become a Foundation Trust have been regularly updated with the last update in December 2008.

The Healthcare Commission took over responsibility from the Commission for Health Improvement and plans to use its new system to carry out annual "min-checks" on hospitals, primary care trusts and other healthcare organisations.

For the first two years of its existence, the Healthcare Commission continued the annual reporting of NHS providers using star ratings where NHS trusts were awarded one, two or three stars based upon their performance measured against clinical targets.

From 2006, an annual health check replaced the 'star ratings' assessment system and looked at a much broader range of issues than the targets used previously. It sought to make much better use of the data, judgments and expertise of others to focus on measuring what matters to people who use and provide healthcare services. Trusts had to declare their compliance with the core standards set out in Standards for Better Health[9][10], published by the Department of Health in 2004.

The overall aim of the new assessment of performance, and the information gained through the process, was to promote improvements in healthcare. The annual health check process was designed to use views of patients and users of services as well as robust data sources for the arms-length monitoring of clinical performance. This lessening of the target setting by Whitehall was in line with the 'light touch' strategy set out by Gordon Brown in his 2005 budget and compatible with the vision proposed by David Cameron at the 2006 Conservative conference. It also aimed to help people to make better informed decisions about their care, promote the sharing of information and give clearer expectations on standards of performance

Significant variations between the accounts of hospitals and the evidence at the Healthcare Commission meant a visit from the commission and an often painful reassessment. As a result of that a new model of regulation began to take shape. The Healthcare Commission was abolished in March 2009. It was then replaced by Care Quality Commission.

The Standards for Better Health (SfBH) document sets out the level of quality that all NHS organisations are expected to meet or aspire to in the delivery of care. The document contains 24 standards with 44 elements that healthcare organisations are annually assessed against. From April 1st 2009 the responsibility for regulating SfBH has moved from the Healthcare Commission (abolished on 31 March 2009) to the Care Quality Commission:

The standards have been developed with two principle objectives; first, they provide a common set of requirements applying across all health care organisations to ensure that healthcare is commissioned and provided safely and are of a high quality; second, they provide a framework for continuous improvement in the overall quality of care that people receive.

The standards set out in SfBH are organised within seven "domains", which are designed to cover the full range of health care as defined in the Health and Social Care (Community Health and Standards) Act 2003. The domains cover all areas of health care, including prevention, and are described and monitored in terms of outcomes.

The seven domains are:-

➢ Safety

➢ Clinical and Cost Effectiveness

➢ Governance

➢ Patient Focus

➢ Accessible and Responsive Care

➢ Care Environment and Amenities

➢ Public Health

A complex and wide ranging network of information gathering systems is being developed to support the drive to improve quality across the NHS; the backbone of Ara Darzi’s next stage review.

From April 2010 all healthcare providers working for the NHS will be legally obliged to publish "quality accounts" on safety, patients’ experience, and clinical outcomes, in the same way that they publish financial accounts.

The accounts will augment the government’s agenda on choice by giving patients information - accessible through NHS websites - on all health services in England, to help them decide where to be treated.

Legislation will dictate that all providers produce their first quality account - carrying a pre-selected set of measures for public consumption - at the end of 2009-10. This means deciding which measures will be included, and making sure solid data collection is in place to report them, before the end of March 2010.

Comparison

With a contextualist approach to this analysis, we conclude that each country’s healthcare system is in important ways unique and highly local: a product of its distinctive history, its particular politics, its economic system, its geographical and cultural diversity, and its values.

We grouped our analysis according to three dimensions of contextual approach to change management.

Context of change: why and when

Content of change; what?

Process of Change: how?

In the Turkish Heath System there is excessive private sector provision and very limited regulation of the market. It is very difficult to have a control over prices charged in the private sector although the SSI published a regulated price list for all health service clinical activities. The calculation of list prices is performed annually by a Reimbursement Committee at the SSI. It is then published and distributed but the process of calculation is not public information.

Public hospitals in Turkey have dual budget system comprised of general budget and revolving budget. General budget is an amount allocated centrally according to the number of people employed, their salaries and bed capacity of hospitals. Hospital management does not have any flexibility about how this budget could be used as it is centrally directed. Around 70% of that goes to wages and salaries. Therefore the revolving budget is an important resource for hospitals. They also have total control over how to use that budget. This budget comprises payments for procedures based on a declared price by the SSI.

As a result of excessive private sector provision, a number of clinicians work for the private sector. In England, there is now a rising concern around the similar issue of working hours for consultants. With the rise of the private health market, consultants sometimes work for more than one organisation, one of which is usually in the private sector. The Cooperation and Competition Panel has recently started an inquiry about consultants’ hours and investigates issues around this topic. This has been a problem for the Turkish health system for sometime and the recent remedy had been to introduce performance-based supplementary payment system (PBSP). The system covers three levels of calculation of performance; there is an organisational upper limit, an organisational performance metric (between 0 to 1) and an individual performance score for clinicians. The system of measuring individual performance of clinicians has been an issue of debate for sometime. In USA it is considered that this approach undermines clinical autonomy. In England however, strong professional presence, self regulation and autonomy are strong and such approaches would be/ have been very difficult to implement. In Turkey the system is currently living with the difficulties that this change has brought to organisational culture. The dominance of the medical profession in health service management in Turkey has a direct influence on how managerialism and understanding of performance management are perceived in organisations. This is expected to cause increasing internal competition both within clinical teams and between clinical and managerial teams. If such an approach with performance based payment for clinical personnel is introduced in the English NHS then the apparent divide between these two subcultures would be widened. It would not be very supportive of networking, partnership, collaboration, and benchmarking principles of the modern NHS.

In Turkey, Government hospitals and private hospitals serve different groups of society. Although it is argued that there is not a class system in Turkish society, the class system becomes very apparent in health services. High income people get private health care, low income or no income groups get government health care, private sector employees get private health insurance and private health care. As explained above, the problems of provision at government hospitals are immense and any person who can afford private care prefer that as they would want to avoid queues and paperwork in Government hospitals. This is another issue which might become an area of future concern for English health care if there is increased private sector provision.

References:

Department of Health (1997) The New NHS White Paper.

Department of Health (2002) Reforming NHS Financial Flows: Introducing payment by results, London

DoH (Department of Health) (2004), Payment by Results, .uk, 8 March: London.

Gazi, A., Tengilimoglu, D., Top, M. and Tarcan, M. (2009). “Evaluation of Performance Based Supplementary Payment System Made by Personnel at the Ministry of Health Hospitals: The Example of Ankara Training and Education Hospital”, Finance Politic & Economic Comments Journal, 46 (538): 53-74.

Jizek, O., Turkkan, A. and Pala, K. (2010). “The Effects of the Performance Related Payment System on Primary Health Care in Bursa”, TAF Preventive Medicine Bulletin, 9 (6): 613-622.

The MoH of Turkey (1993). National Health Policy. Ankara.

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Sulku, S.N. (2011). The impacts of health care reforms on the efficiency of the Turkish public hospitals: Provincial markets. Munich Personal RePEc Archive. , access date May 30, 2011.

Tengilimoglu, D., Pay, U., and Kisa, A. (2008). The Inefficiency of Performance Based Physician Payment Scheme in Turkey. In World Neighbours Sharing Strategies to Transform Healthcare, Proceedings of the Fifth International Conference on Health Care Systems, Dennis Emmett (ed), October 13-15, 2008, Milwaukee, Wisconsin, pp.30-45.

Wanless, D (2002) Securing Our Future Health: Taking a long term view, Final report, London: Her Majesty’s Treasury.

Yenimahalleli Yasar, G. (2011), “Health transformation programme in Turkey: an assesment”, International Journal of Health Planning and Management, (26): 110-133. Published online 27 October 2010 in Wiley Online Library () DOI: 10.1002/hpm.1065

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[1]Norwich Business School University of East Anglia Norwich, NR4 7 TJ e-mail: p.guven:uea.ac.uk tel: 01603 591179

[2] Assist. Professor, Department of Health Service Management, Faculty of Health Sciences, University of Ankara, Turkey. Sukriye mah. Plevne cad. No:5 Aktas Kavsagi Altindag-Ankara, Turkey. E-mail: gulbiyey@ Tel: +90 312 319 14 50/1185 Fax: +90 312 319 70 16

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