The Evolution of HTA in Emerging Markets Health-Care ... - TREE

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OHE Consulting Report for PhRMA 5 January 2011 The development of collective funding arrangements in itself has the potential to drive up expectations about access to health care. This was particularly evident in Brazil: the emphasis there on health care as a ‘constitutional right’ creates demands that outstrip available resources. Although the share of Government spend (12% of tax revenue at the state level) is not too far behind developed economies, this still represents a relatively low absolute spend per person (US$837 compared to $4028 in OECD countries in 2008 (OHE calculations based on OECD Health database for 2010). Lesson 1: Incomes are growing in emerging markets, but resulting increases in funding for health care are likely to be out-‐paced by rising demands and expectations. In such situations, HTA may have a role in assisting the health care system to reconcile rapidly expanding demand with more slowly expanding resources. HTA can provide a potential means of handling this in a more explicit and transparent way, and in promoting public debate about priorities. However, addressing ‘rationing’ in this way requires a willingness to engage in active debate about ways of addressing demand and supply. Such a debate will inevitably refer to the appropriate balance between national procurement and individual clinician decision making. Degree of centralisation As we have noted, in all three countries the degree of centralisation is relatively high or increasing: Brazil has public and private systems but the private system is centrally regulated. There is regional and local control of the public system, but there is a constitutional right to health care, and the three major pharmaceutical programmes are national entitlements; China is increasing central control through an expansion of its three public schemes. National oversight is shared with Provincial administration; Taiwan introduced a single payer system in 1995, and operates a national benefit package. In all three countries, however, there appears be little “active third party purchasing” as we define this in our model in which the payer moves beyond passively administering fee-‐for-‐service systems (occasionally cutting or capping fees to contain costs) to deciding actively what it is going to cover, who is going to provide it, and how they are going to be paid. In Brazil, there is some use of DRGs, and in China, an interest in cost-‐per-‐case tariffs is emerging. However, there is some way to go before priorities are set and services purchased to meet those priorities. Another impact of “fee-‐for-‐service” as used in China and Taiwan is an incentive to provide additional services, especially those on which additional income can be earned – either because fees exceed costs or because additional revenues can be earned on services not covered by the fee scale. In China, artificially low prices are set for ‘basic services’: this creates strong incentives for overuse of new technologies, where providers are free to set higher prices. And in Taiwan, the difference between drug acquisition cost and reimbursement payments provides strong incentives to over-‐ 58
OHE Consulting Report for PhRMA 5 January 2011 prescribe medications. In each case, the wider ‘architecture’ of the health care system, in terms of reimbursement and corresponding incentives for providers and patients, is resulting in distorted behaviours that in turn result in “second-‐best” outcomes. In this situation, where some prices (e.g., payments to physicians) differ substantially from true opportunity costs, economic theory suggests that it will not be straightforward to determine optimal prices of other products, such as drugs. Similarly, HTA (in the sense of ‘micro’ appraisals of individual technologies) offers a ‘defensive’ means of countering perverse incentives affecting the uptake of technologies. However, in these circumstances it is likely that there may be less to gain from HTA per se, than from a fundamental review and reform of the underlying reimbursement mechanisms. HTA, in the micro sense, may seem rational, but if it is built upon an underlying structure that is flawed, it may not improve things. If the architecture of the system needs to be changed, then reforms that address this are needed. We have termed the assessment of such reforms as “macro HTA”. Lesson 2: HTA of individual technologies is not a substitute for the reform of health care systems. Where health care systems create obviously bad incentives, this type of micro HTA is unlikely to compensate for these failings. HTA should not be approached out of context. HTA should be tied, in a case-‐by-‐case way, to what else is going on in the health care system. HTA typology: the focus and breadth of HTA More generally, we observed that in each of the three countries examined in this report, there was a lack of clarity about the purpose of HTA and what role it could (or should) play. Possible objectives, some of which were mentioned in key informant interviews, include: -‐ -‐ -‐ -‐ Keeping costs down Improving clinical quality Improving allocative efficiency Improving equity in access It is helpful in this context to remind ourselves of Figure 7 taken from Battista and Hodge (2009) which we reproduce below as Figure 12 which summarises a “natural history of HTA” as they see it. Arguably: China is at the “Emergence” category, with an interest expressed and now a modest investment of resources, notably in the new initiative with NICE around clinical practice guidelines. These are likely to focus on efficacy and relative effectiveness; Brazil is between “Emergence” and “Consolidation” with CITEC appraising pharmaceuticals and other procedures. The focus of HTA is cost-‐effectiveness and the breadth is new technologies. However, resources are modest and the priority setting process is informal; Taiwan is at the “Emergence” stage, albeit with an exclusive focus on pharmaceuticals, but with modest resources and minimal scientific capacity. Use seems to be to establish the 59
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