Fiscal Policy toward Long-term Growth and Sustainability under an Aging Society: Achieving Sustainable Social Spending

Transcription

1 Fiscal Policy toward Long-term Growth and Sustainability under an Aging Society: Achieving Sustainable Social Spending Measures to achieve sustainable healthcare system: achievements and challenges of health technology assessment in advanced countries Professor Alistair McGuire, LSE Health, LSE, UK

2 Growth rates in health care expenditure and GDP (Asia) Trends in Asia similar to historical trends in Europe/N. America Of course expenditure levels are different Australia/ N.Z/Japan/S. Korea at wealthier country levels Rest of Asia well below Most growing

3 Market fails so how is health sector efficiency maintained? Third party payment overcomes private health care insurance aspects Various incentive payment schemes Yardstick competition Prospective payment schemes DRGs based on PAST average costs/production Primary care payments Quality (HTA) assessment of health care interventions Clinical guidelines Evidence on efficacy/efficiency Economic evaluation of health care (Cost-Effectiveness)

4 Demand-side and supply-side cost sharing Traditional approach to financing problems Demand-side cost sharing Consumer shares financial risk (co-payments, deductibles, level of coverage, etc) Given health care elasticity of demand (-0.2% to -0.3%) & increasing costs of some medicines increasingly ineffective in reducing expenditure Modern approaches involve supply-side cost sharing Incentive contracts to share financial risk Utilisation review Empirical evidence utilisation review reduces hospital expenses by 7-10% Reduces admissions and length of stay

5 Global Revolution: Prospective payment & DRGs DRGs sets fixed reimbursement level per admission for homogenous types of hospital output DRG = cases with similar conditions and processes of care Provides incentive to conserve costs Hospitals who spend more than the flat rate DRG reimbursement lose Hospitals who spend less than the flat rate DRG reimbursement gain Rates determined by Diagnostic Related Groups (DRG) DRGs modified to take account of local wages, teaching status Reimbursement P AC (regulated price)

6 Yardstick competition Basic model that underlies DRG pricing Shleifer (Rand Journal of Economics, 1985) Introduces modern regulatory theory into the health care sector Trying to replicate the perfect competition outcome P= MC (or at least P=AC) Uses information across all providers to induce competitive outcome Under assumptions which are open to modification Strong evidence that competition for funds within a fixed (DRG) price system can improve throughput and outcomes

7 DRGs and technology (quality) All DRG systems have the similar property of being tied to EXISTING technology Health care sector expenditure growth is driven by technology up-take and diffusion Technology explains anywhere between 15% - 55% of health expenditure growth Even lower unit cost technology increases expenditure as patient demand increases

8 Health Technology Assessments Complementary role of HTAs to DRGs is not surprising Particularly in Europe this has focussed on pharmaceuticals, but is being rolled out to a widening definition of technology Cost-effectiveness is increasingly under-pinning the evidence base But it s role is only part of a general movement towards value-based negotiation

9 Health Technology Assessments Most Health Technology Assessments rely primarily on Clinical Guidelines Supports Managed Care and Risk sharing by the providers as it dictates treatments Supports utilization review (itself an effective control) Supports self-regulation of medical (monopoly) profession

10 Health Technology Assessments Cost-effectiveness of treatments after Clinical Guidance established What is the value for money provided by new technology? Always judged against existing standards of treatment Not just medicines, all treatment types

11 Health Technology Assessments Value for money based on the relative cost of a new treatment to the standard treatment ALL RELATIVE TO the relative benefit gained from the treatment relative to the standard treatment ICER = TC New -TC Exisitng TE New -TE Existing

12 Health Technology Assessments Data required on Standard of care (clinical guidelines) Treatment costs (difficult in itself) Treatment effects (more so) Head to head comparisons of treatment Definition of outcome? Clinically determined? Quality Adjusted Life Years gained (QALYs)? Timescale to be considered? Population to be considered?

13 Health Technology Assessments Treatment outcomes UK/Sweden/Canada/Belgium/Netherlands use QALYs Allows comparison ACROSS treatment areas Germany evidence from standard clinical trials France different measures of outcome USA some private insurers using clinical measures, but generally CEA not widely supported (as of yet) in public domain

14 Health Technology Assessments: Value Based Pricing New health care technology prices tied to VALUE provided Payment for Performance Value tends to be based on Health Benefit provided Estimated as Therapeutic Value Added Cost per QALY Willingness to pay/opportunity cost All embody inconsistency Different therapeutic values Cancer cost per QALY threshold higher

15 Health Technology Assessments What defines value for money? Cost-effectiveness threshold must be defined UK (NICE)/Sweden (HTA) use thresholds Current UK position If most plausible estimate is below 20,000 per QALY gained cost-effective and supports use of publicly funded health care resources If it is above 20,000 per QALY: Are there benefits not captured by the QALY? Has quality of life aspect been adequately measured? Above 30,000 per QALY: Less/not likely to recommend the technology Appraising life-extending, end of life treatments (cancer therapies) The treatment is indicated for patients with a short life expectancy, normally < 24 months There is sufficient evidence to indicate that the treatment offers an extension to life, normally of at least an additional 3 months, compared to current NHS treatment The treatment is licensed or otherwise indicated for small patient populations (normally 7,000) Decisions to date imply 50,000 per QALY threshold

16 Recent years & UK -health Difficult to tease out the effect of NICE itself in the last ten years. There has been changes of governments and ring-fencing of NHS funding, immigration (younger population), etc. One does observed containment of UK health expenditure (% GDP): Source: OECD Health Data 2015.

17 Health Technology Assessments Has NICE restricted access? Appears to have restricted volume of treatment In line with Clinical Guidelines has targeted population European HTA bodies have caused delays in access through increased regulation Further regulation to decrease market access time (especially for medicines)

18 Market access Risk-sharing contracts FDA schemes Accelerated Approval Priority Review Fast Track Designations Breakthrough Therapy EMA Conditional Marketing Authority Adaptive Pathways Pilot

19 Increasing tension in regulation? VbP Future Efficient regulation has to give consistent signals and be transparent More exceptions? Evidence on social weightings remains weak Lack of transparency? Patient access schemes/risk sharing Discounts De-coupling of price/reimbursement decisions from R&D decisions? Current patent/price system liable to remain in place Further designation changes in market access Increasing emphasis on value More CONDITIONALITY? Conditional approval Conditional pricing to establish innovative benefit

20 Conclusions Global rise in DRG reimbursement within hospital sector Still > 40% of health care expenditure on in-patient care Complemented by HTA Clinical Guidance Cost-effectiveness analysis Further regulation aimed Increasing importance of quality of care Quicker approval for effective medicines Increasing importance of payment for performance/risk rating Other methods work, but are cruder and do not sustain VALUE for money Price controls Price cuts Demand side cost sharing Aggregate restrictions