Balancing financial incentives during COVID-19: A comparison of provider payment adjustments across 20 countries?

Provider payment mechanisms were adjusted in many countries in response to the COVID-19 pandemic in 2020. Our objective was to review adjustments for hospitals and healthcare professionals across 20 countries.We developed an analytical framework distinguishing between payment adjustments compensating income loss and those covering extra costs related to COVID-19. Information was extracted from the Covid-19 Health System Response Monitor (HSRM) and classified according to the framework. We found that income loss was not a problem in countries where professionals were paid by salary or capitation and hospitals received global budgets. In countries where payment was based on activity, income loss was compensated through budgets and higher fees. New FFS payments were introduced to incentivize remote services. Payments for COVID-19 related costs included new fees for out-and inpatient services but also new PD and DRG tariffs for hospitals. Budgets covered the costs of adjusting wards, creating new (ICU) beds, and hiring staff.We conclude that public payers assumed most of the COVID-19-related financial risk. In view of future pandemics policymakers should work to increase resilience of payment systems by: (1) having systems in place to rapidly adjust payment systems; (2) being aware of the economic incentives created by these adjustments such as cost-containment or increasing the number of patients or services, that can result in unintended consequences such as risk selection or overprovision of care; and (3) periodically evaluating the effects of payment adjustments on access and quality of care.(c) 2021 Published by Elsevier B.V.

Automated summary

In response to the COVID-19 pandemic, payment adjustments for hospitals and healthcare professionals were made in many countries. This study reviewed the adjustments across 20 countries, distinguishing between compensating income loss and covering extra costs related to COVID-19. The findings showed that public payers bore most of the financial risk associated with COVID-19. Different payment mechanisms were used to address income loss and COVID-19 costs, depending on the country's existing payment system.