Lessons from the GHS

The General Healthcare System (GHS) in Cyprus was implemented in two phases. Phase A was introduced in 2019, covering outpatient services, including primary care and the concept of general practitioners as gatekeepers to the system, specialised doctors and outpatient diagnostic radiology and clinical laboratory services. Phase B, which was introduced in June 2020, added inpatient care within the GHS coverage. Other services will gradually also be incorporated, such as Accidents & Emergency and rehabilitation services. The key principles of the GHS, include equity in receiving care and free choice of providers in a non-discriminatory manner for all beneficiaries. More than a million beneficiaries, around 95% of private hospitals and clinics and over 90% of the island's doctors are registered. The free choice for providers has resulted in a significant redistribution of patient load from public to private institutions. Currently, private hospitals hold around 60% of the inpatient workload, in contrast to 40% before the GHS’s introduction.

While the initial launch of the GHS has been deemed as a milestone in the industry’s reform, several challenges remain which need to be addressed to ensure the system’s long-term sustainability. According to Andreas Papaconstantinou, Director of the Health Insurance Organisation (HIO), speaking at the 6^th Healthcare Conference, HIO is working to identify and resolve these issues while maintaining not only the economic but the overall viability of the GHS. Currently, the HIO is in the process of enforcing policies aimed towards refining the system’s efficiency, while optimising the budget allocation for providers. Some of the areas the GHS could improve, include the implementation of effective oversight mechanisms at policy level, differentiation of pricing structures among providers, provide a standardisation through well rounded evidence-based clinical protocols as well as implementing stricter quality controls. In addition, the need for digitalisation, technology and workforce continue to be among the key challenges that the providers should focus on.  

The transition into GHS has also sparked debate, with many arguing that this shift has compromised the quality of care offered by the private sector. In the fourth year of operation of the GHS, a crucial second agreement relevant to the reimbursement of inpatient care is being negotiated between the HIO and participating hospitals and clinics. In line with the HIO’s attempt to address the identified challenges and focus on improving the quality of care provided, the new agreement incorporates a value-based reimbursement approach through the introduction of Quality Criteria (QC). These QCs aim to encourage competition among all providers, incentivising them to prioritize the quality of care delivered.

In addition, the new agreement distinguishes between specialised and non-specialised medical cases. This distinction creates a differentiation in the pricing structure across the pricing structure of the type of cases combined with the level of quality offered by the respective hospitals and clinics, regardless of their capacity. Unlike the first agreement, where a large proportion of the hospitals and clinics’ reimbursement was subject to the negotiating power and capacity of each provider.

As part of the value-based reimbursement methodology, the QC consider factors such as the hospitals and clinics’ capabilities including, among others the offering of Intensive Care Units, Accidents & Emergencies units and the respective hospital’s capacity, provider accreditation, patient satisfaction that will be measured through surveys, patient profile in order to ensure non-discrimination, provider internal committees aimed towards safeguarding patient safety and other qualitative criteria.

The increasing demand for healthcare services, is pushing hospitals to carry out intensive capital investments, improving their infrastructure and technological capabilities, by upgrading existing medical equipment, acquiring cutting-edge medical tools, introducing new specialised treatments, and incorporating healthcare management systems. Private institutions have the capability in responding faster in adopting quality improvements, which may potentially provide an advantage in contrast to the public institutions.

Nevertheless, new approaches to healthcare challenges are needed to effectively respond to the magnitude of the current identified and future challenges and to ultimately ensure the sustainability of the GHS. The GHS and the providers themselves should focus on a more effective delivery of care through digitalisation and use of technology, enhance patient centric models of care, address staffing issues and ensure staff satisfaction through efficient human resource management and by effectively improving their operational, financial and governance policies. The introduction of the second agreement, including the Quality Criteria, can work as a driving force towards addressing many of the aforementioned challenges.