HEALTH BENEFIT PLANS

IN OECD COUNTRIES

Valérie Paris (OECD)LAC webinar, May 15, 2014

Health benefit package/basket/plan = all services, activities, and goods covered by publicly funded statutory/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

What is this webinar about?

Benefit package is one of the three dimensions of health coverage

Source : Adapted from Busse, Schreyögg and Gericke, 2007

OECD countries have organised coverage for health care in many ways

Main source of basic health care coverage

Countries

Tax-funded health system

Australia, Canada, Denmark, Finland, Iceland, Ireland, Italy, New Zealand, Norway, Portugal, Spain, Sweden, United Kingdom

Health insurance system

Single payer Greece, Korea, Luxembourg, Poland, Slovenia, Turkey, Hungary

Multiple insurers, with automatic affiliation

Austria, Belgium, France, Japan, Mexico

Multiple insurers, with choice of insurer

Chile, Czech Republic, Germany, Israel, the Netherlands, Slovak Republic, Switzerland, United States

Source: OECD Health Systems characteristics survey, 2012

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)

How do patients and doctors know what is covered?

The OECD collected information on health systems characteristics in 2012

Question 1. How are the services or benefits covered by basic health coverage defined (check all that apply)?

a) For medical/surgical procedures:

A positive list is established at the central level A negative list (of non-covered procedures) is established at the central level Individual health insurance funds establish their own positive lists (e.g., services that are required

to be covered) Individual health insurance funds establish their own negative lists (e.g., services that are excluded

from coverage) Providers under budget constraints establish their own positive lists at the local level The benefit basket is not defined, every procedure performed by a clinician is considered by basic

primary coverage schemes

Comments/clarifications: b) For pharmaceuticals

A positive list is established at the central level A negative list (of non-covered procedures) is established at the central level Individual health insurance funds establish their own positive lists (e.g., services that are required

to be covered) Individual health insurance funds establish their own negative lists (e.g., services that are excluded

from coverage) Providers under budget constraints establish their own positive lists at the local level The benefit basket is not defined; prescription drugs that are approved for marketing are

systematically covered by basic primary coverage schemes Comments/clarifications:

NHS countries

Source: OECD Health Systems characteristics survey, 2012

Positi

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Neg

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list

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Indi

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Positi

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AustraliaCanadaDenmarkFinlandIcelandIrelandItalyNew ZealandNorwayPortugalSpainSwedenUK (England)

Medical procedures Pharmaceuticals

Health insurance systems

Posi

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list

, ce

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Neg

ative

list

, ce

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Indi

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ositi

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Indi

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Prov

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Bene

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fined

Posi

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Neg

ative

list

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Indi

vidu

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lists

Indi

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nega

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list

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Prov

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posi

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list

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Bene

fit b

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fined

AustriaBelgiumChile (public)Chile (private)Czech Rep.EstoniaFranceGermanyGreeceHungaryIsraelJapanKoreaLuxembourgMexicoNetherlandsPolandSlovak RepublicSloveniaSwitzerlandTurkey

Medical procedures Pharmaceuticals

Do OECD countries use HTA to make coverage decisions?

Source: OECD Health Systems characteristics survey, 2012

Nombre of countries using HTA systematically or occasionnally to make coverage decisions or to set reimbursment price

CountryHTA includes

economic evaluation

Public payer perspective

included

Health system perspective

included

Societal perspective

included

Affordability or budget

impact considered

Australia ● ● ● ● ●Austria ● ● ● ○Belgium ● ● ○ ● ●Canada ● ● ● ○ ●Chile ○ ○Czech RepublicDenmark ● ● ● ○ ○Estonia ● ●Finland ● ● ● ● ●France ● ● ● ● ●GermanyGreece ● ○ ● ○ ●Hungary ● ● ● ● ●Iceland ● ● ●Ireland ● ● ● ● ●Israel ● ● ● ○ ●Italy ● ● ● ● ●Japan ○ ○Korea ● ● ● ● ●LuxembourgMexico ● ○ ● ○ ●Netherlands ● ○ ○ ● ●New Zealand ● ○ ● ○ ●Norway ● ● ● ● ●Poland ● ○ ● ○ ○Portugal ● ○ ○ ●Slovak RepublicSlovenia ● ● ○ ○ ●Spain ● ○ ● ○ ○Sweden ● ○ ● ○ ○Switzerland ● ● ● ○ ○Turkey ●United Kingdom ● ○ ● ○ ○United States

HTA methods differ across OECD countries

CountryIndependent

body at central level

Purshasers at central

level

Purshasers at local levels

Independent body on request

Not performed

Australia ● ● ● ○ ○Austria ○ ○ ○ ● ○Belgium ● ● ○ ○ ○Canada ● ○ ● ● ○Chile ○ ○ ○ ○ ●Czech Republic ○ ○ ○ ○ ●Denmark ○ ● ● ○ ○Estonia ○ ○ ○ ● ○Finland ● ○ ○ ○ ○France ● ○ ○ ○ ○Germany ○ ○ ○ ○ ○Greece ○ ○ ○ ● ○Hungary ○ ● ○ ○ ○Iceland ○ ○ ○ ○ ●Ireland ● ● ○ ○ ○Israel ○ ● ○ ○ ○Italy ○ ● ● ○ ○Japan ● ○ ○ ○ ○Korea ○ ● ○ ○ ○Luxembourg ○ ○ ○ ○ ●Mexico ○ ● ● ○ ○Netherlands ● ○ ○ ○ ○New Zealand ● ● ○ ● ○Norway ● ○ ○ ○ ○Poland ● ○ ○ ○ ○Portugal ● ○ ○ ○ ○Slovak Republic ○ ○ ○ ○ ○Slovenia ● ○ ○ ○ ○Spain ○ ● ● ○ ○Sweden ○ ● ○ ○ ○Switzerland ○ ○ ○ ○ ○Turkey ● ○ ○ ○ ○United Kingdom ● ○ ○ ○ ○United States ○ ○ ○ ○ ●

HTA is performed by different stakeholders

DECISIONS ON COVERAGE AND PRICES FOR

PHARMACEUTICALS

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.)

The 2013 OECD study on Value in pharmaceutical pricing

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METHOD: Analyse of reimbursement and pricing process in 14 countries

METHOD : Sample of 12 Products, marketed in 2004-2011

Bevacizumab: cancer, several indications (breast, colorectal, lung, kidney) with different therapeutic valueCetuximab: cancer, 2 indications (colorectal, head and neck)Sunitinib: cancer, oral, several indications (GIST, renal cell, pancreas)Cabazitaxel: prostate cancer

Dabigatran: oral anticoagulant and prevention of stroke

Fingolimod: Multiple sclerosis

Eculizumab: orphan drug

Boceprevir and Telaprevir: hepatitis C

Ranibizumab: age-related macular degeneration

Sitagliptin, Sitagliptin-metformin, Type 2 diabetes

Illustrative of different situations (severity, efficacy, cost-effectiveness, social impact, size of population target, etc.), not representative of the whole market

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• 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

How is « value » assessed

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• 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

What are the perspectives and methods adopted for economic evaluation?

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Observed for the sample of products studied:

•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

Not much consideration of « wider benefits » (beyond clinical improvement) in our sample of products

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• 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.

Setting limits?

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International price benchmarking is still being used by many OECD countries

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• 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)

The use of product-specific agreements in our sample of countries/products

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• 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

What do products get for added therapeutic value?

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WHAT ABOUT COST-SHARING REQUIREMENTS FOR COVERED SERVICES?

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  

Information collected in the Health Systems Characteristics survey on cost-sharing

Information collected in the Health Systems Characteristics survey on cost-sharing

Outpatient primary care physician* contacts

Examples: - Free at the point of care; - Copayment of €2 per visit; - Copayment of €10 for the first of each semester; - Co-insurance of 20%; - Not reimbursed if not referred

Pharmaceuticals Examples: - Copayment per prescription item ($5 for generics and $20-25 for brandname drugs); - Cost-sharing: 10% of cost with a min of €5 and a max of 10€ per item; - Cost-sharing of 0%, 35%, 65% or 85% depending on drug category + €0.50 per item - Deductible of SEK 900 beyond which cost-sharing diminishes by step as spending increases (from 50%, 25%, 10% and 0%). - Any difference between actual price and reference price for medicines subject to reference price

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".

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.

User charges for outpatient medical services

Cost-sharing on outpatient medical care Primary care Specialised careFree of charge for all Canada, Denmark, Hungary, Italy,

Poland, Spain, United KingdomCanada, Denmark, Hungary, New Zealand, Poland, Spain, United Kingdom

Australia (≈80% of GP services) Australia,Chile (public-public) Germany (SHI)Germany (SHI-85% pop) Greece (public providers),Greece (public provider) Ireland (public-public)Ireland (40% of pop), Israel (3 out of 4 HIFs)

Mexico (public-public)

Mexico (public-public)Austria (specific) Austria, Israel (specific)Netherlands (general) Netherlands (general)Czech Republic, Finland, Czech Republic, Finland, Italy,Iceland, Norway, Portugal, Sweden

Iceland, Norway, Portugal, Sweden

Chile (provider choice) Chile, Japan, Korea, Luxembourg,

Japan, Korea, Luxembourg, New Zealand, Slovenia

Slovenia

Copayment+co-insurance Belgium, France Belgium, France, IcelandDeductible + co-insurance Switzerland SwitzerlandFull price Ireland (60% of pop)

Free of charge for some

Deductible

Copayment

Co-insurance

• 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

User charges: for other benefits

Exemption/reduction of cost-sharing

Chronically ill and/or disabled

Low-income

Entitled to social

benefits Seniors Children

Pregnant women

Beyond an absolute

cap on cost-sharing

Beyond a cap

related to income

Australia

Austria

Belgium

Canada

Chile Czech Republic

Denmark

Finland

France

Germany

Greece

Hungary

Iceland

Ireland

Israel

Italy

Japan

Korea

Luxembourg

Mexico

Netherlands

New Zealand

Norway

Poland

Portugal

Slovak Republic

Slovenia

Spain

Sweden

Switzerland

United Kingdom

United States

WHAT DO HEALTH ACCOUNTS TELL US ABOUT

HEALTH COVERAGE AND BENEFIT BASKET?

From « entitlements » to actual coverage

Entitlements: benefit basket and cost-sharing

Health spending level and financing structure

Availability of health care supply

Affordability of health care services and goods

Cost-sharing exemptions and caps

Population not covered, services not covered, informal payments

• 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:

Examples

Share of spending in inpatient care by financing agent, 2011

Share of pharmaceutical spending by financing agent, 2011

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

What do patients pay for?Shares of out-of-pocket medical spending by services and goods, 2011 (or nearest year)

• 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 »

Future OECD work on benefit basket

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

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