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Don Husereau, University of Ottawa
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What if: The price of new provider fees were coordinated across Canada, supported by
existing HTA capacity and networks?
Don Husereau, University of Ottawa
23-04-11 1
Context• Increasing expenditure on
providers (CIHI, 2010)• Opportunities for gains in efficiency
(WHO, 2010; OECD, 2011)• Provider choices (medical
technology) source of expenditure growth (Newhouse, 1992; Cutler and McClellan 2001)
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Context
• Fees are cost-based - little incentive for choosing high- versus low-value service
• Uncertainty of cost-effectiveness leads to “experimental“ or uninsured status
• Lack of standardization for fee code development – opportunities for “whipsawing”
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“Whipsawing”
“Cars” pajamas
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Current use of HTA in adopting new provider fees
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Proposed Option: HTA-based Pricing Provider Services
• A pan-Canadian approach, informed by HTA – Develop standard method for
translating HTA information into value-based fee price modifiers, and create value-based modifiers for future provider services. [Mandatory]
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Proposed Option: HTA-based Pricing Provider Services
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YearTechnology A
(Cost = $200 per year)Technology B
(Cost = $2,100 per year)Total healthcare costUnits Fee Costs Tech A
CostTotal Cost Units Fee
CostTech B cost
Total Cost
Pre-modifiers($30 fee for both)
1,000 $30,000 $200,000 $230,000 1,000 $30,000 $2,100,000 $2,130,000 $2,360,000
Post- modifiers ($45 for A; $15 for B)
1,400 $63,000 $280,000 $343,000 600 $9,000 $1,260,000 $1,269,000 $1,612,000
Difference 400 $33,000 $80,000 $113,000 -400 -21,000 -840,000 -861,000 -748,000
Example using Value-Based Provider Fee Modifiers
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Proposed Option: Optional Functions
– Develop a standard approach to assessing the value of new fees, which could be adopted by individual provinces. [Optional]
– Develop a resource-based relative-value schedule of all or some (those most often used) fee codes across provinces. [Optional]
– Review new fee codes and create suggested provider fees for adoption across jurisdictions. [Optional]
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Benefits• Reduce inequity in fees for services across
country• Reduce unnecessary political pressure• Influence providers’ behavior toward best
practices in use of health technologies and avoid unnecessary health expenditures
• Works with supplier-induced demand (Evans, 1974; McGuire and Pauly 1991) and fee-based utilization
• Provide a platform for further health system efficiency through– Coordinated technology management– Coordinated health and human resource needs
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Challenges• Whose value? – QALYs may be
insufficient - will require explicit, agreed-upon recognition of value
• Costly - requires priority setting• Variation in current fee schedules –
requires communication and priority setting
• What is high-value? – requires threshold or other measure of opportunity cost
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Implications for Canada
Recommendation:
New coordinating body required that must be governed provincially.23-04-11 12
