In 2008 private expenditures (=co-payment) amounted to 21.8 billion Dkr. This is equal to 15% of the total sum of health expenditures, up from 12 % in 19992. It is debatable what the basis for this calculation should be because parts of municipal nursing home expenditures are part of the base. If the private expenditures are calculated from a base of regional public health expenditures the percentage in 2008 would be around 18%.
The main categories with co-payment in Denmark are seen in Figure 25. The main categories are drugs and adult dental treatment with around 30% each of total co-payment. Physiotherapy has been increasing over the period. As percentage of disposable income there has been an increase from 2.2% to 2.4 % in 2007.
Figure 25: Co-payment in Denmark: Categories and development 1993-2007144
35,7 32,4
20,7 22,8
29,7 29,4
9,6 12,8
175 2,7
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%Medicin mv Briller, kontaktlinser Tandlæge Fysioterapeut, kiropraktor, naturlæge Hospitaler & læger
Total/person:
Dkr. 4,085 7,985
% disponsable income:
2.1% 2,4%
Hospitalization exists in Finland, Norway and Sweden, Figure 26. It should be noted that there is a similar concern for equity in the other Nordic countries as in Denmark.
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Figure 26 Co-payment in the Nordic countries as of January 2010145
Proposal
The essential elements of this proposal have been lifted from the Welfare Commission‘s proposal from 2006146. The essential elements of the proposal has been pulled together in table 3 (tables 15.1 and 15.2 in the Welfare Commissions report) (Velfærdskommissionen 2005)
This means that services that have been free at the point of consumption for more than a century or more will be covered by co-payment. The level of payment, column 2 in table 3, does not deviate from the other Scandinavian countries, if anything slightly lower.
The net contribution to financing of health care will be around 2 billion Dkr. However, there will some net savings because demanded service volume will decrease as the price rises from 0 to 20-150 Dkr. per visit.
The decrease in expenditures will be around 1.3 billion Dkr. (column 4). This is important for another reason, namely that it frees up capacity in that the total volume of services is expected to decrease by 25%
(maybe a bit overoptimistic. The decrease more likely will be in range of 15-25%). The ‗excess‘ capacity will create room for the increased demand that over the years will come from the aging population, but in the short term also means a decrease in income for GPs and specialists.
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Table 3: Co-payment proposal by the Welfare Commission: fee and total effects
Co-payment, Dkr.
Total effect Billion Dkr.
Of which volume
decrease Revenue
General practice 1.4 0.6 0.8
* consultation 75
* telephone or e-mail contact 20
* home visit 150
Out-of-hours service, GP 0.3 0.1 0.1
* consultation 100
* telephone contact and home
visit 20
* telephone contact 50
* home visit 150
Consultation with specialist 100 1.0 0.5 0.4
A&E visit 150 0.2 0.1 0.1
Visit out-patient dep. 125 0.4 0.0 0.4
Hospitalization 50/per day 0.2 0.0 0.2
TOTAL 3.4 1.3 2.0
Note: It is assumed that utilization of GP services, specialist consultations, and A&E visits decrease by 25% after the introduction of co-payment. Hospitalizations and visits to outpatient departments are not affected by co-payment .- Numbers do not add up due to rounding-off.
To counter inequity issues the Welfare Commission introduce a ceiling for co-payment equivalent to 1% of income, i.e. when total payment during a year reached 1% of income, services again become free. The price for this ceiling is a reduction of revenue by almost 38% (this reduction has been included in the numbers in column 5 in table 3. The 1% ceiling means that high income groups pay more in absolute terms than low income groups. There are other ways to minimize distributional consequences, for instance an absolute ceiling for everybody like in Sweden, for instance Dr. 1,500 but such a system would be more unfair than an income ceiling because it would weigh heavier on low income groups than high income groups. Another approach would be to follow the model for subsidies to prescription medicine, where co-payment decreases by increasing level of use and become zero after a cut-off level has been reached.
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The Welfare Commission did not include the costs of administering the co-payment scheme. It obviously will not be free. Administration costs will depend on how the co-payment scheme is administered. If it is done by using the existing systems for reimbursement of GPs and specialists, e.g. that an invoice is sent to patients every quarter based on the electronically submitted reimbursement claims from GPs and specialists, then it can be administered at fairly low costs. For the hospitals a co-payment module can be added to the electronic patient record system. Both the GP/specialist systems and the new co-payment module for hospital care can be linked to the tax system to monitor the percentage of income going to co-payment. It is assumed that the administration costs will be 100-150 million Dkr.
If we assume 150 million Dkr. per year, this means that a “cost-benefit ratio” of 13 will be the result.
However, it should be noted that it is not a cost-benefit ratio in the usual sense of the word because the benefits (=revenues) cannot by any stretch of imagination be interpreted as willingness to pay. In addition the benefits stemming for creating more fiscal sustainability has not been calculated either.
Within the Danish system of voluntary health insurance the introduction of co-payment will lead to increased demand for insurance in ‗denmark‘ that essentially is a ‗co-payment insurance‘ that reimburses patients for part of their co-payment. From a theoretical and empirical point of view this would lessen the volume impact of co-payment and hence the ‗savings‘ due to decreased volume of utilization.