Iceland Health

Most of the tips have been acted on

11th November 2022

Icelandic Health insurance has mostly remedied weaknesses identified by the National Audit Office in its 2018 audit of the institution.

This is revealed in a recent follow-up report by the National Audit Office. It states that since the review was conducted four years ago, Icelandic Health Insurance has strengthened its operations with regard to the preparation, conclusion and follow-up of contracts, the division of responsibilities and the division of tasks between the Ministry of Health and the Icelandic Health Insurance is clearer and a health policy is available until 2030. Some issues need to be more carefully followed up, for example, a new agreement on production-related financing for Landspítali University Hospital. In its previous audit, the National Audit Office emphasized that the operation of the agency needed to be strengthened in order to fulfil its tasks in a satisfactory manner. However, fixed budgets for the Icelandic Health Insurance have decreased (at constant prices) in recent years, while projects have increased substantially.

Have strengthened their operations but it is imperative to conclude contracts with certain professions according to the National Audit Office

Following an audit by the National Audit Office at the time, five recommendations were submitted for improvements ranging from long-term policy and needs analysis to a framework agreement with specialists and a contract for production-based funding of clinical services at the National Hospital. In addition to the proposals to the Icelandic Health Insurance, two recommendations from the National Audit Office were directed at the Ministry of Health.

The follow-up report points out that in one case it is essential that Health Insurance continue to work on improvements. The agreements on health services for specialist doctors and physiotherapists are concerned. The report states that negotiations have proved extremely difficult, but the Health Insurance Administration is seeking to improve the preparation and conclusion of its contracts in accordance with the emphasis of the report of the National Audit Office.

Further details of the recommendations from the National Audit Office from 2018 and what the Icelandic Health Insurance has done to address them.

Proposal by the National Audit Office: Icelandic Health Insurance needs to strengthen its contracting and analytical departments and strengthen its employees' professional knowledge of contracts and purchases of health services in collaboration with the Ministry of Welfare. In the opinion of the National Audit Office, it is a prerequisite for the agency to be able to negotiate and purchase health services under the authority of the Minister in a meaningful manner. In this context, the Institute's board must establish a long-term policy.

What has happened:
The board of the Icelandic Health Insurance has confirmed the long-term policy of the agency, along with proposals for measures to implement it that are in line with the government's health policy. The organization of the Institute was changed from 2021 onwards. The tasks of the negotiating unit have been clarified and the department has been given greater flexibility to carry out the negotiation itself. A new monitoring unit monitors the activities of contracting parties and of service providers receiving payments from the Agency.
Proposal by the National Audit Office: It is important that the contracts concluded by the Icelandic Health Insurance are based on thorough analysis of the needs of Icelanders for health services and ensure a suitable quantity of services of acceptable quality. It is essential that the Agency priorities its service purchases in order to prevent excessive waiting times and inefficient use of the funds devoted to the purchase. To this end, the agency must actively monitor the actual costs of service providers and analyse the benefits and costs of different services in the context of the overall interests of health insured persons and the state.

What has happened:
In addition to a new supervisory department, an economic unit was created that is intended to play a significant role in analytical work, including the benefits and costs of different services. Information technology issues have now come to the fore in the Institute to strengthen its ability to carry out independent analyses in its field.
Proposal by the National Audit Office: The National Audit Office encourages Icelandic Health Insurance to develop and implement ways to ensure quality and measure the performance of services that the agency contracts for, e.g. in the form of quality indicators. To this end, it is necessary to consider whether decisions on contracts and payment participation can be made based more on clinical guidelines and medical indications. It is essential that the agency strengthen supervision of the services purchased and ensure the review of contracts if necessary.

What has happened:
Icelandic Health Insurance has made increasing references to clinical guidelines in its contracts and has made demands for the submission of specific quality indicators and performance measurements. Changes in the organizational structure have had a positive impact on the organization's ability to perform these tasks. The use of standard contractual terms and increased formalization of contract work provide a stronger basis for the monitoring and review of contracts.
Proposal by the National Audit Office: It is important that Icelandic Health Insurance ensure a systematic and economically viable purchase of health services with its contracts. In this context, the framework agreement on the purchase of services by specialized physicians outside hospitals needs to be reviewed. The National Audit Office encourages the directorate to examine whether it is possible to contract on the services of each speciality with detailed requirements that take into account the needs of health-insured persons, the objectives of law and the criteria of the Directorate of Health.

What has happened:
There are disagreements on the health services of self-employed specialist doctors and physiotherapists. Icelandic Health Insurance has sought to amend its contracts in accordance with comments from the National Audit Office, e.g. with regards to requirements and the definition of quality indicators, which are being developed in collaboration with key institutions within the health system. The opinion of the Competition Authority on the right of market participants to join associations in the pricing of services is pending.
Proposal by the National Audit Office: The National Audit Office considers it essential that Icelandic Health Insurance continue to develop an agreement between the Institute and Landspítali on production-based financing of clinical services in good collaboration with the hospital and the Ministry of Welfare. It is worthwhile to work towards the agreement being used to maximise the efficiency and efficiency of the hospital as one of the main pillars of the Icelandic healthcare system.

What has happened:
A new contract with the Icelandic Health Insurance at Landspítali on production-related financing has been signed. A similar agreement with the Akureyri Hospital took effect at the same time.