Ten years ago, Croatia overhauled payment in primary health care: it moved from blanket capitation payments to a value-based model. The goal was simple yet ambitious – to achieve better outcomes for patients with the same or fewer resources. Experience shows that if you start reform in primary care, you can significantly improve both the quality and coordination of treatment.
Why start specifically in primary care
Across the world, health care faces the same problem: unlimited patient needs and limited resources. Added to this are chronic diseases, fragmented care, and a shortage of health workers. The World Health Organization therefore recommends starting reforms, especially payment reforms, in primary care. This is precisely where prevention, continuity of care, and costs across the entire system can be most influenced.
The Croatian context is clear: approximately 3,88 million inhabitants, a single state health insurance fund, expenditures around 7,15 % of GDP and roughly 1 300 dollars per person per year. Primary care has a long tradition, a system of „chosen doctor“ operates, and there is a strict gatekeeping role – without a referral from a general practitioner you cannot access a hospital, and most reimbursed medicines may be prescribed only by physicians at the primary level. Approximately 55 % of doctors work privately, 45 % within a network of 48 public centers; one general practitioner looks after about 1 700 patients.
What value-based payment looks like
In 2013, Croatia introduced a new financing model for general practitioners, gynecologists, pediatricians, and dentists, about 4 800 professionals in total. The previous system relied mainly on capitation payments with a very narrow list of billable services and minimal funds for digitalization. The new model combines a fixed and a variable component: the fixed part covers practice operations (e.g., the nurse’s salary, medicines within the practice) and an age-weighted capitation payment. The variable part rewards work and quality – through fee-for-service payments and through incentive indicators.
Fee-for-service payments covered roughly 200 diagnostic-therapeutic procedures, with preventive services priced slightly higher to promote prevention. Key performance indicators tracked the prescribing of medicines, sick leave, referrals for laboratory tests, and referrals to hospitals. First, a baseline value (the median) was set, and physicians were motivated to stay below it so that more care would remain at the primary level. Complementing this were „five-star“ criteria – meeting preventive panels, participation in group practice, and other elements that increased access and quality.
Group practice, simple panels, and results
A novelty was group practice: either single-specialty (general practitioners only) or multi-specialty (with gynecologists and pediatricians), with the option of horizontal referrals according to specific skills. Practices could be up to 5 kilometers apart, exceptionally up to 10, and met regularly in „peer“ groups. Monthly case discussions were funded and brought credits for license renewal – without the need for sponsored conferences. For noncommunicable diseases, simple, physician-created panels were introduced to manage hypertension, diabetes, and COPD; the WHO labeled this approach an example of good practice.
The first effects were quick and measurable. When physicians began deliberately requesting only necessary laboratory tests, the number of referrals to laboratories fell by one fifth in a single month. The broader goal also makes sense: in the United Kingdom, 84 % of cases remain managed in primary care, and the Croatian reform aimed in the same direction – doing more „at home“ and sending fewer patients to hospital unnecessarily. According to the reform’s proponents, quality increased and health outcomes improved; physicians also had a clear motivation, since better work meant higher income.
