June 2012 Health Insurance Law EMBA June 9, 2012

June 2012

Health Insurance Law

EMBA June 9, 2012

Approach• A focus on Switzerland

• The overview of the present system

• A few choice of topics to study in depth (choice by students)

• Class discussion about future rationing of health care & ethical issues

June 2012Prof. Junod – EMBA - Health Insurance Law2

Plan of the class

1. Some numbers to discuss

2. The Swiss insurances

3. Health insurance: for patients & for professionals

4. The future: should costs be contained? How? What ethical safeguards?


Health insurance concerns encountered?• Should I get insurance? • Complementary insurance?• Why is so expensive?• Will I be reimbursed?• Can I choose my health care providers?• Who will pay me if I am sick?• How do I get my product reimbursed?• Do I need an authorization?


PART 1: SOME NUMBERS


What do they mean? What are the implications?

• For governments – federal and cantonal

• For taxpayers• For patients• For doctors• For companies


PART 2: THE SWISS INSURANCES


A variety of insurances Public insurances:• Old age + survivors • Invalidity / disability• Health care• Accident (work & non-work)• Maternity• Military• Unemployment• Old age (professional) (occupational benefit plan) (LPP)*

Private insurances


Three pillars system for old age benefits


Some definitions• Illness « any impairment to the physical, mental or

psychological health that is not the consequence of an accident and which requires a medical examination or treatment or results in incapacity for work »– The Champix case.

• Accident « the sudden, unintentional, harmful influence of an exceptional external force on the human body, resulting in the impairment of physical, mental or psychological health or death. »

• Important implications whether accident or illness.


PART 3: HEALTH INSURANCE


The basics of the system (I)

• Since 1996– Several revisions

• Mandatory– For whom? Exceptions? – Basic + supplementary private insurance

• Paid by– Premiums + State assistance + State direct payments– What kind of premiums?

• Approved by State (minimal oversight)• By 3 age groups• By canton• By insurance fund


The basics of the system (II)

• Choices left to the patient– Insurance fund (80-90)

• can be changed every year, sometimes twice a year– Deductible per year

• 300 (500) – 2’500 for adults; 0 (100) to 600 for children– Healthcare network with primary care physician as point of care


The basics of the system (III)

• Choices left to the insurance fund– Setting premiums– Very little: cannot refuse anyone for basic insurance– Health questionnaire prohibited for basic insurance

• What about risk selection?– Risk compensation: yes, but to be improved– But « tiers payant » vs « tiers garant » for drugs– The case of Assura…?


What is covered?• Fixed set – identical for all

– Mandatory for insurance funds

• Territorial principle– What about treatment abroad?

• Outside the canton? EU? Outside EU?• What if less expensive?

– No « Cassis de Dijon »

• System of open or closed list– Open: health care services

• Exceptions OPAS: annexe 1– List of specialties (drugs)– List of devices (semi-closed)


Tarmed and Swiss DRG• For ambulatory care

– TARMED– The difficulties

• Insurance funds’s control over doctors’ diagnostic

• For hospital care– Swiss DRG– The fears:

• Will patients be kicked out of the hospital too soon?• Will private clinics be unfairly advantaged?


Maternity• All « normal » maternity care

– e.g., 2 ultrasounds scans; antenatal checkups; antenal class for CHF 100; amniocentesis if over 35 years or risk factor over 1:380; 3 breastfeeding consultations.

• Without any copay !• Covers the first 3 months of the baby for « normal » care.

• Loss of wages covered by separate insurance


What is typically not covered?• Loss of wages (in practice not by health care insurance)• Dental care• Most medically assisted reproduction services• Private care in hospitals• Experimental treatment + clinical trials• Off-label drug use (with exceptions)• What is covered by another insurance

– health care insurance plays residual role

• + statute of limitations: 5 years.


What costs do patients bear?• Premiums

– Minus government subsidy for about 30% population

• Deductible– Max. to be chose: CHF 2’500

• Copay (retention fees)– 10% - sometimes 20% for certain drugs– Max. CHF 700 a year for adults / 300 for children

• Hospital copay– Up to CHF 15.- a day.


Private insurance• Left to the discretion of the patients

– Significant part of the population has at least 1

• Insurance funds free to propose or not and what to propose– Only way to make money for insurance company

• Much less regulated: federal law on private insurance contracts.

• A great variety of policies proposed– Typical: Private or semi-private care in hospitals– Also: alternative medicine. – Also: approved drugs but not on LS


Control over excessive care

By regulatory means:

By judicial means:• Obligation to reimburse for patients

– Rare. – If « not effective, expedient or economical »

• Obligation to reimburse for health care providers– Legal basis: article 56– Common– Very controversial– Complex– Has changed recently for drugs


How do drugs become reimbursed?• Detailed submission to FOPH• Administrative decision. Appeal possible only by manufacturer• How is the factory price set?

– 2 comparisons:• Foreign price• Reference product

• How is the final price set?– Add margins and VAT

• What further conditions to reimbursement?• No more marketing/publicity


What if a generic drug?• Mandatory discounts based on market’s size.

– min. 10% difference if below CHF 4 million a year (over the 4 years preceding patent expiry)

– min. 20 % if between 5 and 8 millions– Min. 50% if between 8 and 16 millions– Min. 50% if between 16 and 25 millions– Min. 60% if above 25 millions.

• Different copays depending on the price difference– 10% in normal cases– 20% if important price differences between drugs with same active

substance

• Possible substitution by the pharmacist– Paid by the insurance fund


What if a drug is not reimbursed?• Free pricing

• Antitrust law

• Price supervisor

• Parallel imports


PART 4: COST CONTAINMENT


The Myozyme decision of the Supreme Court

• Drug outside the LS• Drug for rare disease• Price: half a million a year• Two efficacy requirements• One economicity requirement• The conclusion• The debate – the implications• The ordinance was then changed, confirming the judgment.


The QALY tool• Cost per quality-adjusted life year

– Takes into account both survival benefits and quality of life– Standardized for all kinds of treatments

• Thresholds– Around CHF 100’000 in Switzerland– Below £ 30’000 in the UK

• More if end-of-life?

• Advantages of the QALY system• Drawbacks of the system


Cost containment in the pharma sector• Negotiations with industry• Retrospective controls over previously accepted drugs• Extending reference pricing: more countries• More frequent price comparisons: every 3 years• Reimbursement of revenues if first price is excessive• Increased discounts for generics• Reduced distribution margins• More FOPH limitatio


What more could be done?• How to bring patients and providers to be more cost-sensitive

without discouraging needed care?• Popular vote of June 17: is it a good solution?• Unique healthcare fund? Is it a good idea?• Setting premiums on the basis of revenues + fortune?

• Your ideas?


Ethical principes• How to implement fairness and equality?• Should ressources be increased? Shared differently?• Should care be rationed?

– Who should make the sacrifice?


PART 5: CONCLUSION



Thank you !

Questions ?

Documents

June 2012 Health Insurance Law EMBA June 9, 2012