Leading innovation in world healthcare

1、european issues in cost containment the italian case content 1 what is the issue with healthcare? 2 how does the italian healthcare system operate in this respect? 3 how to solve the problem? 1 whats the issue with healthcare? healthcare expenditure has steadily increased over time cost containment:

2、 a major issue no structural solutions major future concerns: demographic trends innovation unsustainability of the welfare state european trend: increasing state involvement public arrangements for health insurance from self-regulation to state involvement extending material and personal scope valu

3、es: solidarity (risk, income) cost containment: the major issue charges and co-payments restrictions (on what is reimbursed by the insurer) budget setting controls nb! italy has tried all cost containment tools! 2 the italian healthcare system: overview nhs complex network of public and private prov

4、iders. financed mainly by public hand (71%) but covers only 45% of total healthcare expenditures. providers are either public, private, or subcontractors for the nhs. nhs covers all medical care but co- payments are significant the italian healthcare system: financing general revenues (31%) regional

5、 taxes on manufacturing (irap) 1998: irap replaced by pay roll taxes pay-roll taxes (59,5%) specific regional contributions (5,5%) revenues of the healthcare sector (4,3%) thus: main source of income: regional taxes on manufacturing and payroll taxes! and still those debts! cumulative deficits of it

6、alys nhs, millions of euros, 19941998: years millions of euros up to 1994 1 750 1995 1 170 1996 2 070 1997 5 090 1998 4 130 cumulative deficit 14 210 source: corte dei conti (court of auditors) (10). consumption of healthcare (% gdp - oecd) 0 2 4 6 8 10 12 % germany france the netherlands belgium it

7、aly austria uk spain consumption of medicines (% gdp - oecd) 0 0,2 0,4 0,6 0,8 1 1,2 1,4 1,6 1,8 2 % france italy belgium germany spain sweden uk the netherlands consultations with prescription (% - oecd) 0 10 20 30 40 50 60 70 80 90 100 % italy belgium spain france germany uk sweden the netherlands

8、 1994: the italian reference price redefined the positive list clustering based on broad population/ indication: product form not important therapeutic added value for broad population against “golden standard” nationwide drug expenditure budget “free” pricing: based on costs estimates introducing g

9、enerics pharmaceuticals: the key to changing cost containment policy group a, b, c and h: criteria being clinical efficacy, the risk-benefit balance of the therapy, acceptability of the therapy to patients, and the costs of the therapy which causes: long negotiations for group a, and especially grou

10、p b, products (the gate-keeping component of the system), causing: no incentive for innovation in product form no incentive for innovation for sub group no incentive for incremental innovation essential problems in healthcare, also in italy: tpp and one size fits all tpp = any organization, public o

11、r private, that pays or insures health or medical expenses on behalf of beneficiaries or recipients. third-party payment leads to excess consumption, which leads to runaway costs, which leads to third-party rationing, which leads to limited supply of services, which leads to consumer discontent, whi

12、ch leads to governmental interference: out of pocket spending disappears! obstacles to reform are thus: protect the hapless patient tax code, serious problem for the sustainability of the welfare state insurance regulations provider regulations infrastructure, entrenched interests entitlement mental

13、ity! 3 how to solve the problem? moving from “one size fits all” and third party payment. consumer insurer provider ? to two party contracts and patient choice! consumer insurerprovider employer consumer shift in paradigms: see health care as investment and not as costs see medicines as part of tota

14、l health care value innovation in healthcare, also incremental and also in product form or sub group make market access fast and without unneeded administration most importantly: empower the patient/health consumer! the new paradigm: empower the patient! voluntary insurance: insurance has always bee

15、n a risk sharing institution, so it should be voluntary to insure some risks restore patient/physician direct relationship agencies should be made accountable to the consumer patients should be able to merge resources: most importantly with web-enabled information milestones of reform: governmental

16、actions should be to: roll-back regulations malpractice reform enact health savings accounts! facilitate pay for themselves employers: less paternalism, provide market and finance physicians: cash practices, retainer medicine facilities: price disclosure, fewer discounts (esp. pharmacists) health pl

17、ans: insurance versus medical management pharma companies: price pressure, generic competition, r & d conclusion: a cost containment policy that acts on prices and budgets alone can have serious implications in terms of welfare! patient choice and patients financial responsibily should replace one size fits all regulations. m