Health benefit plans in OECD countries

1. Health benefit plans in OECD countries Valérie Paris (OECD) LAC webinar, May 15, 2014

2. What is this webinar about? Health benefit package/basket/plan = all services, activities, and goods covered by publicly fundedstatutory/mandatory insurance schemes (social health insurance) or by National Health Services (NHS) (definition proposed by Busse et al, 20005, in a European context) • Covered = “at least partially covered” (there might be cost-sharing) • Publicly funded refers to the agent who finances health care. It needs to be government or mandatory health insurance (could be private). In OECD countries, in 2012

3. Benefit package is one of the three dimensions of health coverage Source : Adapted from Busse, Schreyögg and Gericke, 2007

4. OECD countries have organised coverage for health care in many ways Source: OECD Health Systems characteristics survey, 2012

5. How do patients and doctors know what is covered? The range of benefits covered can be defined: • Explicitly, i.e. by itemised list of activities and good, • e.g. « positive list » of reimbursed medicines; catalogs of procedures and activities; • Or implicitly, i.e. in very broad terms, e.g. «  all medically necessary services » (Germany) • Positively, by stating which services and goods are covered • Negatively, by stating which services and goods not covered • Often, by a mix of those methods (depending on categories of goods and services)

6. The OECD collected information on health systems characteristics in 2012

7. NHS countries Source: OECD Health Systems characteristics survey, 2012

8. Health insurance systems

9. Do OECD countries use HTA to make coverage decisions? Nombre of countries using HTA systematically or occasionnally to make coverage decisions or to set reimbursment price Source: OECD Health Systems characteristics survey, 2012

10. HTA methods differ across OECD countries

11. HTA is performed by different stakeholders

12. Decisions on coverage and priceS for pharmaceuticals

13. The 2013 OECD study on Value in pharmaceutical pricing Context: « Value-based pricing » envisaged in UK, recent changes in Germany, and changes announced in France Objectives were to explore: • How a sample of OECD Member Countries refer to “value” when making decisions on reimbursement and prices of new medicines; • How this value is assessed; • Whether countries are willing to pay a price premium for innovation • Which kind of innovations receives an extra premium; • Whether specific rules apply for some medicines (orphan drugs, end of life drugs, etc.)

14. METHOD: Analyse of reimbursement and pricing process in 14 countries

15. METHOD : Sample of 12 Products, marketed in 2004-2011 Illustrative of different situations (severity, efficacy, cost-effectiveness, social impact, size of population target, etc.), not representative of the whole market

16. How is « value » assessed • Clinical outcomes: guidelines prefer final endpoints (i.e. survival) but accept intermediate and surrogate outcomes (i.e. reduced cholesterol) if final not available. Assessment bodies use what is available (quite similar across countries) • Countries do not always agree on the level of “innovativeness” of new products • Utility weights used to estimate QALYs gained: Countries’ guidelines for economic evaluation often indicate a preference for multi–attribute utility (MAU ) “generic” instruments used in Randomised Clinical Trials; • In practice: assessment reports use data provided by companies, who use both generic MAU instruments and disease-specific instruments which are more sensitive to specific outcomes • Utility weights can has an impact and can potentially change the decision

17. What are the perspectives and methods adopted for economic evaluation? • The perspective adopted is potentially influential on the price paid • Several possible perspectives: • Public payer only:considers costs (and savings) for public payers for health system + social services where relevant : Australia, UK, Canada’s public plans • All health care payers: including patients, families or private complementary coverage (e.g. France) • Societal perspective: considers and monetizes all costs and benefits for the society (cost-benefit analysis): preferred in Nordic countries and the Netherlands • In our sample: most often public payers and direct costs only

18. Not much consideration of « wider benefits » (beyond clinical improvement) in our sample of products Observed for the sample of productsstudied: • Comfort of use valued when it is likely to reduce costs E.g.: The oral anticoagulant got a price premium over competitors in some countries for its 1st indication but its price was reduced when the second indication was approved (market size x 4) • No evidence that « innovation per se » is rewarded • No evidence that recognition of wider societal benefits are valued (even for the drug for multiple sclerosis)… but sample of products is not representative

19. Setting limits? • Most countries seem reluctant to set and publish an explicit incremental cost-per-QALY threshold (or range) beyond which they refuse to pay for any drug (England, Netherlands are exceptions) • “Implicit thresholds” can be revealed by past decisions • The threshold (or threshold range) varies across therapeutic areas • Countries pay more for life-threatening disease, end-of-life and orphan dugs, well beyond explicit or implicit thresholds. Rules are more or less explicit. • Other limits? Several countries consider budget impact as an integral part of the evaluation process (with an impact on decision-level) and high BI sometimes led to delayed entry or referral to a higher level of decision-making.

20. International price benchmarking is still being used by many OECD countries

21. The use of product-specific agreements in our sample of countries/products • In our sample, more than 20 agreements used to address: • Uncertainties about clinical efficacy or effectiveness: • Uncertainties about cost-effectiveness (ICER): performance-based agreements, linking price to actual performance (for individuals or for a group of patients treated) • Uncertainties about budget impact : financial agreements aiming to control budget impact and ensure value-based pricing • Most product-specific agreements in our sample address uncertainty on ICER or too-high ICER (= price negotiation). • Used for cancer medicines with variable ICER / by indication (price discrimination across indications) – value-based pricing • But indications subject to agreements are not always similar across countries... • Italy and the UK are big users (of non-confidential agreements)

22. What do products get for added therapeutic value? • Obviously: price premium over competitors... and non inclusion in reference price clusters (Germany) or lower price than competitors (France) • In some countries, most innovative products get “international price” while others are priced relative to competitors’ price in internal market (France, Canada Federal, Germany, etc) • There seems to be a link between the price premium granted and added therapeutic value but it is impossible to say “how much does a QALY worth” – even within a given country because the price of a QALY (or ICER accepted) varies across therapeutic areas: does it reflect value of market conditions? • International benchmarking and volumes are important determinants of prices

23. What about cost-sharing requirements for covered services?

24. Information collected in the Health Systems Characteristics survey on cost-sharing Section 4. Comprehensiveness of basic health care coverage Section 4 aims to assess the level of basic health care coverage to which “typical” working-age adults are entitled to. Responses should not consider children, seniors and other categories of population which may be entitled to higher levels of benefits (e.g. people with serious illnesses). In countries with multiple insurers allowed to offer different levels of benefits, responses should refer to the most frequent or most typical situation. Question 13. Is there a general deductible* that must be met before basic health coverage pays a share of the cost or the full cost of covered services? □ Yes If so, what is the amount of the deductible that must be met before basic primary health coverage pays/reimburses? (national currency units) ______ What is the period in which the deductible applies (e.g. year, lifetime, episode of illness, etc.)? □ No  

25. Information collected in the Health Systems Characteristics survey on cost-sharing Question 14. Are patients required to share the costs of health care for the services and goods listed below? Please indicate the type and level of cost-sharing left at the charge of users by basic primary health coverage, in the case of an adult with no specific exemption of user charge. If there is no cost-sharing, please indicate "no cost-sharing".

26. Different types of cost-sharing Co-insurance: cost-sharing requirement whereby the insured person pays a share of the cost of the medical service (e.g. 10%). Copayment: fixed sum (e.g. USD 15) paid by an insured individual for the consumption of itemized health care services (e.g. per hospital day, per prescription item). User fee, prescription fee sometimes used as synonymous. Deductible: lump sum threshold below which an insured person must pay out-of-pocket for health care before insurance coverage begins. It is defined for a specific period of time: one year, one quarter or one month. Deductibles can apply to a specific category of care (e.g. physicians’ visits, pharmaceutical spending) or to all health expenditures (general deductible). Extra-billing: refers to any difference between the price charged and the price used as a basis for reimbursement purpose. In the pharmaceutical sector, where “reference prices” are often used, a fixed reimbursement amount is determined for a cluster of products, while sellers remain free to set a higher price. The patient pays out-of-pocket any difference between the price of a medicine and the reference price.

27. User charges for outpatient medical services

28. User charges: for other benefits • Inpatient care is more often free of charge or only subject to small daily copayments, except in a few countries with co-insurance rates (France, Japan, Korea, etc) • In a few countries, inpatient care is free for patients admitted as public patients in public hospital but subject to copayments for patients admitted as private patients (Australia, Italy) • User charges are the common rule for pharmaceuticals, with a few exceptions. They most often take the form of co-insurance (with differentiated rates) or fixed prescription charges. Several countries also have deductibles

30. What do health accounts tell us about health coverage and benefit basket?

31. From « entitlements » to actual coverage Entitlements: benefit basket and cost-sharing Population not covered, services not covered, informal payments Availability of health care supply Affordability of health care services and goods Cost-sharing exemptions and caps Health spending level and financing structure

32. Examples • Canada and Hungary indicated that patients can access primary care services for free. • Japan indicated a 30% co-insurance rate for these services. • The share of PHI and OOP payments in spending for basic medical and diagnostic care is:

33. Share of spending in inpatient care by financing agent, 2011

34. Share of pharmaceutical spending by financing agent, 2011

35. What do patients pay for? Shares of out-of-pocket medical spending by services and goods, 2011 (or nearest year) Note: This indicator relates to current health spending excluding long-term care (health) expenditure. 1. Including rehabilitative and ancillary services. 2. Including eye care products, hearing aids, wheelchairs, etc. Source: OECD Health Statistics 2013

36. Future OECD work on benefit basket • What is the decision-making process to update/revise the benefit basket in OECD countries? • Stakeholders involved • Criteria used • Assessment in terms of transparency, acceptability • Case studies on decisions made for a set of « borderline activities »

37. Thank you for your attention • Contact: valerie.paris@oecd.org