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Reimbursement mapping: UNITED KINGDOM. 2011. Content. Key Economic Indicators Healthcare Overview Reimbursement Systems Market Access Funding Mechanisms HTA Decision makers, Acronyms and Links Austerity Measures 2011. Key Economic Indicators UK. Healthcare system overview.
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Content • Key Economic Indicators • Healthcare Overview • Reimbursement Systems • Market Access • Funding Mechanisms • HTA • Decision makers, Acronyms and Links • Austerity Measures 2011
Healthcare system overview • The UK comprises England, Scotland, Wales and Northern Ireland. • The Department of Health (DoH) registers products, whereas the ‘National Health Service’ (NHS) assesses and buys the vast majority of medical devices in the UK. The NHS is a department of the government’s DoH - the NHS is funded from general taxation (76%), national insurance contributions (15%) and user charges (5%). Other sources of funding come from private health insurance (1%), out-of-pocket payments (11%) and other sources such as charitable donations, etc. (<1%). • The United Kingdom (UK)’s healthcare system is primarily public, with 80% of funding coming from taxation, 12% from national insurance, 4% from charges and miscellaneous, 3% from Trust interest receipts and 1% from capital receipt.
Healthcare system overview • Approximately three-quarters of the UK National Health Service (NHS) budget goes to the Primary Care Trusts (PCTs), who are responsible for delivering health care and health improvements within a local area. PCTs are grouped into regional Strategic Health Authorities (SHAs); these groups help develop local NHS strategy and provide a link between PCTs and the national Department of Health. • PCTs have their own budgets and set their own priorities. • They provide a range of community health services, including: funding for general practitioners, medical prescriptions, and commissioning of hospital and mental health services.
Reimbursement • Manufacturers are free to set the price of their products in the UK, except for products classified as pharmaceuticals (e.g. diagnostic imaging contrast agents) which are subject to supply-side control by the DoH’s Pharmaceutical Price Regulatory Scheme. • However, funding is tightly controlled by the PCTs - PCTs are charged with financial responsibility to provide optimal care across primary, secondary and community healthcare services and stay within a given budget. Device manufacturers are therefore free to set price but have to negotiate funding with the providers or directly with the PCTs. • PCTs provide a range of community health services, including: funding for general practitioners, medical prescriptions, and commissioning of hospital and mental health services, as such they are considered key stakeholders in healthcare decision making. For example, drug formularies are developed locally by PCTs and NHS Trusts.
Market Access • The providers can sometimes purchase healthcare products based on their own selection criteria, but usually purchasing medical devices is governed by the Primary Care Trusts (PCTs) and the wider NHS organization. • Regulatory approval is required through CE marking from the Medical and Healthcare Products Regulatory Agency, MHRA – part of the DoH. • The MHRA aims to protect and promote public health through regulation, developing benefit and risk profiles for medicines and devices, helping people to understand the risks and the benefits of the products that they use and facilitating the development of products that will benefit people. • The key activities of MHRA are to operate rigorous surveillance and inspection systems for the investigation of adverse incidents involving medical devices, to safeguard public health, to regulate clinical trials of medical devices, to monitor and ensure compliance with statutory obligations and to promote good practice in the safe use of medical technology.
Funding Mechanisms DRG system • The authority that decides to introduce DRGs in England is the Department of health of the national government and all information on HRGs is linked with activity and financing. In Wales HRGs were adopted as the basis for recording case-mix in 2000. • In England there is a uniform application of HRG while in Wales the government has never formally required NHS Wales organizations to use DRGs or HRGs as the basis of financing and so, the definition of this issue, is left to local agreement. • In case patient pathways are split between providers, services may be provided on a fee for service basis and negotiated between providers. • Drugs and medical devices are part of HRG costs but there are high cost drugs and medical devices, as certain other products, that have been excluded from HRG’s.
Funding Mechanisms Community Care 1/2 • For patients to access medical devices in community care setting they, typically, have to be “prescribed” by a health care practitioner. The item on the prescription can be obtained from pharmacies. Pharmacies purchase medical devices from wholesalers and distributors, and “dispense” the particular device required by the patient on receipt of a prescription. • Therefore, the reimbursement process requires a medical device manufacturer to apply, to have their product listed on the Drug Tariff. This process involves requesting a price and justifying this price with evidence, data, etc. • The administrative process is handled nationally. The Drug Tariff is simply a list of products showing the remuneration level for administrative purposes. • To be listed on to the Drug Tariff an application has to be made to the Prescription Pricing Authority. The price level is assessed by pharmacy advisors in this organization.
Funding Mechanisms Community Care 2/2 • In certain industry sectors, e.g. woundcare, the prescription process is being circumvented. To control prescribing clinicians and managers in Primary Care Trusts (PCTs) are not issuing prescriptions but purchasing products directly or via wholesalers and distributors against their prescribing budgets. • Nurses - are increasingly important stakeholders to engage with. • Supplying products to pharmacies involves dealing with intermediaries such as pharmaceutical wholesalers. Supplying products directly to patients involves negotiating with Dispensing Appliance Contractors (DACs) and other homecare delivery organisations. Supplying products to PCTs involves liaising with DACs, wholesalers and distributors. • Full-line wholesalers include Unichem and AAH.
HTA • Value for money at the national level is commonly assessed through a process of Health Technology Assessment (HTA). • National Institute for Health and Clinical Excellence is an independent organization that provides national guidance and standards on the promotion of good health and the prevention and treatment of ill health. NICE guidance is produced by healthcare professionals, NHS staff, patients, members of the academic world and other members of the wider healthcare and public health community. • NICE does not license drugs or devices. This is done by the Medicines and Healthcare products Regulatory Agency (MHRA). However, NICE does look at particular drugs and devices when there is confusion or uncertainty over their value or when prescribing practices vary across the country. A recommendation by NICE eliminates uncertainty and inequality in prescribing.
Austerity measures • Hospital budget cuts (compared to the previous year): Top line figures for 2011/12 not yet known but expected to be real-terms reduction on current year. This feeds into the tariff for Payment by Results which may require an even larger „efficiency‟ reduction than usual, perhaps in the order of 6% (unpublished figure, quoted from a DH official at recent ABHI conference). • Tender / procurement mechanisms: Pressure from England health department to reduce overall NHS tender activity by channeling more procurement activity through its „NHS Supply Chain‟ rather than procuring locally.England gradual demise of established regional (i.e. sub-national) procurement bodies, with greater pressure on provider trusts to use national bodies but also emergence of some more powerful regional bodies with new alliances involving for example US-based GPOs as well as NHS Shared Business Services. • Price referencing (domestic and cross-border): Domestic: Use of NHS Shared Business Services data in England, with spend analytics input, to „benchmark‟ pricing. • Late payments procedures: Strong UK Government policy for prompt payment in the NHS and some good performance, offset by considerable aberrant local behavior. More potential for helpful developments in emerging Government policy to support SMEs.
