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Implementing Incentives

Organization: Ribera Salud

Country: Spain

Forum: Accountable care

In 1999, the Ribera health district within Valencia acquired the Hospital de la Ribera. As a result of a public-private partnership, this public hospital owned by the regional government of Valencia was run by a private healthcare delivery company called Ribera Salud. In 2003, this contract was broadened to include 40 public primary-care centers as well as the hospital.

The Alzira model, as it is called, combines public funding, ownership and control with private healthcare provision. Ribera Salud receives an annual capitation fee from the regional government and it provides the full range of healthcare services for free to all residents of the designated area in return. They are incentivized to provide high quality care for fear of losing their contract with the Valencian government. The company also has an incentive to keep costs down as it retains profits of to 7.5 percent of turnover, with further profits reverting to the local government.

Another incentivizing factor of this model is patient empowerment and choice. If a patient within Ribera Salud’s catchment area opts to access a different health care provider, they have to pay 100 percent of the costs. Conversely, if Ribera Salud treats a patient from another district, it receives only 80 percent of the average regional cost. This asymmetry keeps a balance: the network can profit from attracting more patients, but must still concentrate on patients within its own districts.

The Alzira model has since been adopted or adapted elsewhere in Valencia and now covers about 20 percent of the region. The local government benefits as the capitation cost is less than 75 percent of the cost-per-inhabitant elsewhere in Valencia and patients benefit from shorter waiting times, reduced re-admission rates and increased patient-satisfaction levels.

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