Towards an effective healthcare payer.

A guidebook for payer reform

As countries are developing and become wealthier, healthcare systems tend to develop and mature in parallel. Investing in a health system is critical to the wealth of a nation: good quality, affordable healthcare generates value. Not just by increasing human capital, but also by increasing productivity and decreasing the long-term cost burden on society.

Healthcare reform in developed countries has typically evolved in three waves. The first wave focused on increasing access to care for everyone (equality in access). This resulted in increasing costs, which led to the second wave: regulation in order to contain cost. This was effective to a certain extent, but resulted in increasing waiting lists and pressures on quality, which led to the third wave: the introduction of incentives and competition to increase value (to optimize the balance between quality and efficiency).

While most high-income countries are in the middle of the third wave, emerging economies – for instance in the Middle East, Asia, South America – are riding a combination of the three waves often at the same time: a tremendous technical and political challenge.

Many countries are working on increasing access to care for everyone and facing challenges with quality, managing cost and trying to make their health care system more efficient by improving incentives at thesame time.

Payer function

There is no silver bullet when it comes to healthcare system reform. A healthcare system comprises various functions of all different players: patient, provider, payer and the regulator. Each of these functions can be organized in various ways and are also inter-dependent, such that the optimal organization of one function is directly dependent on the way other functions are organized. Considering five key building blocks as illustrated in figure 1 can guide through the process of setting up or optimizing the payer function.

Figure 1 - Five building blocks of an effective payer function

KPMG has published a guidebook describing the five building blocks of an effective payer function: the key strategic questions for setting up or reforming the payer function. The document showcases how these building blocks take shape in practice, including five case studies of real-world reforms and other examples of best practices.

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