How are countries compensating health professionals for income losses and extra expenses due to COVID-19?

Cross-Country Analysis

How are countries compensating health professionals for income losses and extra expenses due to COVID-19?

The COVID-19 pandemic has affected incomes of health professionals in two important ways.

First, many health providers are facing a substantial loss of income. Some of them had their elective work reduced while others faced patients forgoing services. Second, many health professionals are facing increased expenditures for COVID-19 treatment preparedness. We have analyzed how 13 countries have been compensating health professionals for income losses and increased expenditures. Data was collected from the COVID-19 Health System Response Monitor (HSRM) (up to 10 June 2020) and through consultations with various national experts.

The payment method of health professionals impacts their potential loss of income during the COVID-19 pandemic

In several countries, certain groups of health professionals, particularly primary care providers (PCPs), are paid prospectively or without a link to their activity, i.e. they are paid on a (predominantly) capitation basis or are salaried employees. This set up results in relatively small to no losses of income.  For these professionals, there was no pressing need for extensive compensation schedules at the moment of this review, for example, the Czech Republic, Estonia, Italy, Israel, Spain and Sweden. However, health professionals that are largely paid retrospectively based on activity such as fee-for-service (FFS) or pay-for-performance (P4P) have proven vulnerable to reduced demand for services and have suffered substantial losses of income. 

Countries are incentivizing e-health and remote services in order to avoid income losses

A first widely seen strategy to mitigate income losses has been that several countries are introducing higher fees for telemedicine and e-health provision (Denmark, Estonia) and/or loosening restrictions on digital or phone consultations (the Czech Republic, Germany, Luxembourg, the Netherlands, Sweden, Switzerland). This is hoped to secure revenue flow to providers to some extent, but also to provide a strong incentive to ensure that health professionals keep on providing services so that patients do not forgo necessary care. For example in England, general practitioners (GPs) can get reimbursement for setting up or enhancing their information technology (IT) capacity and equipment.

Countries employ various strategies to offset income losses of health professionals due to decreased demand for health services 

Table 1 lists the mechanisms countries use to offset income losses for certain groups of health professionals. First, in some countries, health professionals can get non-health care specific COVID-19-related compensation which are available to all self-employed professionals or businesses. In Estonia and the Netherlands, however, this mechanism is mainly intended for those cases where the COVID-19-related compensation payments for health providers do not suffice; whereas, in Israel and Switzerland, this is the main mechanism. Second, some countries provide flat compensations for lost revenue, e.g. extra/higher capitation or temporarily higher fees (the Czech Republic, England, Estonia, Germany, Italy, Luxembourg, the Netherlands). Third, some countries have chosen to broadly compensate certain groups of health professionals through payments based on the previous year’s turnover. Examples include compensating income if it falls by more than 10% in Germany (for physicians, psychotherapists, allied health professionals) or 30% in Denmark (GPs). In the Netherlands, allied health professionals can receive compensation expressed as a set percentage of yearly turnover. Fourth, as is the case in England, payments will temporarily not be linked to performance to compensate for the loss of income due to scaled-back services. GPs will receive payments at rates that assume they would have continued to perform activities at the same levels as before the outbreak. Fifth, several countries are providing payments specifically to cover fixed costs such as rents and employees (the Czech Republic, France, Germany). Finally, at least in Estonia and the Netherlands, there are plans to recoup some of the additional payments after the crisis, e.g. through lower future reimbursement levels.

Table 1: How are countries compensating health professionals for income losses due to COVID-19?

CountryCOVID-19 related compensations to any self-employed professional or business (non-health sector specific)Flat compensation e.g. extra capitation or temporarily higher feesCompensations based on previous year turnover up to a fixed percentageTemporarily suspending FFS or P4P while increasing the share of fixed paymentSubsidies to cover fixed costs such as rents, and employees 
Czech RepublicSelf-employed health professionalsPCPs that perform tests at the end of quarantine of patients;dentistsAll providers (under discussion) Dentists and private health care providers 
Denmark  GPs    
England GPs  GPs 
EstoniaNon-EHIF contracted physicians EHIF contracted providers EHIF contracted providers
France GPsAll health professionals All health professionals 
GermanySolo ambulatory practices considered as entrepreneursPhysicians, psychotherapists and all allied health professionalsPhysicians, psychotherapists, all allied health professionals   
IsraelOutpatient self-employed specialists Inpatient professionals infected or quarantined   
Italy GPs and pediatricians working after hours    
Luxembourg GPs and specialists treating COVID-19 patients    
NetherlandsAny health care providerGPsAllied health professionals   
Spain PCPs treating COVID-19 patients     
Switzerlandself-employed outpatient professionals    self-employed outpatient professionals 

Notes: PCP = primary care providers; GPs = general practitioners; FFS = fee-for-service; P4P = pay-for-performance; CCG = Clinical Commissioning Groups; EHIF = Estonian Health Insurance Fund; PPE = personal protective equipment

Countries are using different ways to pay professionals for their increased expenses due to the pandemic 

Not only may health professionals face a lower demand for regular care, some may be faced with extra expenses related to the COVID-19 outbreak, for example because they have to reshape clinics to implement new distancing measures, hygiene and safety regulations and purchase personal protective equipment (PPE). Some countries provide additional fees for services for (suspected) COVID-19 patients (e.g. England, Germany, the Netherlands) or create arrangements to reimburse extra spending (e.g. Spain). The Czech Republic implemented new fees for antibody tests and France incentivized GPs to treat patients in long-term care institutions with a higher tariff for visits. COVID-19 preparedness and treatment equipment such as PPE, redesigning clinics and waiting rooms, developing e-health platforms, and buying hygiene products are provided in kind (e.g. the Czech Republic, Germany, Israel, Italy) or are reimbursed by the government (e.g. Estonia, the Netherlands, Spain, Switzerland). However, in kind provision and funding may not always be sufficient, meaning that health professionals in these countries may still be searching for PPE and paying for them. Where it is not provided in kind, there seems to be a lack of clarity regarding funding or compensation for additional expenses.

Compensation schemes are often funded from health budgets but also complemented by emergency budgets from government revenue

There are several ways in which national health systems fund the revenue losses and additional spending due to the COVID-19 pandemic. Mostly these reflect a country-specific context and mix of payers as well as fiscal space and insurance fund reserves. In some cases, funds are allocated directly to providers, particularly if they are self-employed or paid via FFS. When professionals are salaried employees or paid on a capitation basis, these funds are typically allocated to payer agencies, such as municipalities, Clinical Commissioning Groups and health insurers. Yet in other cases, health insurers have reserves, either because of legal obligations, from past years or from services forgone during the pandemic, and these are being used to pay for extra COVID-19-related expenses. 

Policy lessons

Overall, there are three broad strategies for countries to compensate for income losses and extra expenses due to COVID-19.  First, countries could attempt to mitigate reduced demand for non-COVID-19 health care services by increasing the availability of e-health and remote consultations through higher reimbursement and looser restrictions. This has the additional benefit that it may prevent patients from forgoing necessary care and allows the providers to deliver real services instead of simply handing out money that may have to be recouped later. Second, in those countries where professionals lost income due to activity-based payment, extra or higher compensations (FFS, capitation), suspending activity-based payment, or subsidies to cover fixed expenses, such as rents or salaries for employees, are all viable options. Furthermore, if not eligible yet, self-employed health professionals could be included in non-health care specific COVID-19-related compensation schemes which are available to any other self-employed professional or business. Third, compensations for COVID-19 related extra expenses could be tackled by providing centrally procured PPE and hygiene products in kind, which would also prevent competition among professionals for PPE. Further options include providing additional fees for COVID-19-related services and reimbursing any expenses related to reshaping clinics to comply with physical distancing, hygiene and safety regulations.

Ruth Waitzberg, Ewout van Ginneken, Cristina Hernandez-Quevedo, Marie-Camille Lenormand, Marina Karanikolos, Sherry Merkur, Wilm Quentin, Giada Scarpetti, Erin Webb, Gemma Williams, Juliane Winkelmann