The effects of reimbursement mechanisms on medical technology diffusion in the hospital sector in the Italian NHS

An analysis of a rural hospital's investment decision under different payment systems

From an economic perspective, large investments in medical equipment are justifiable only when many patients benefit. Although rural hospitals play a crucial role locally, the treatments they can offer are limited. In this study, I characterize investment level that maximizes the total surplus, encompassing patients' welfare and producer surplus, and subtracting treatment costs. Specifically, I account for economic externalities generated by the investment in the rural hospital and for different utility losses that patients suffer when they cannot be treated locally. I demonstrate that the optimal investment level can be implemented if the Health Authority has the power to set specific prices for each disease. Additionally, I explore a decentralized situation wherein the investment decision lies with the rural hospital manager, and the Health Authority can only make a discrete decision between two payment systems: Fee-for-service, which covers all treatment costs, or Diagnosis-Related-Groups, which reimburses a price per patient based on the overall average cost. I find that the Diagnosis-Related-Groups system outperforms the Fee-for-service in terms of total surplus when the treatment cost at the rural hospital is lower. However, when the rural hospital has higher costs and the Health Authority seeks to incentivize investment, the Fee-for-service system is superior.

Adoption of hospital diagnosis-related group financing in Switzerland and the availability of computed tomography scanners

We study the relationship between diagnosis-related group (DRG) financing and the availability of computed tomography (CT) scanners in Switzerland. A number of Swiss hospitals switched to DRG payment for a portion of their payments progressively between 2002 and 2011. As of 2012, all hospitals were required to use DRG payment for a substantial portion of reimbursement. We conducted two main analyses. First, we studied hospitals switching in 2002-2011 and estimated event study models to compare changes in CT availability before and after the adoption of DRG financing, using the hospitals that did not switch during this time as a comparison group. In the second, we compared trends in CT availability before and after 2012, for the hospitals that switched in that year. In both analyses, we find a statistically significant association between the switch to DRG financing and lower levels of CT availability.

Around the Tables - Contextual Factors in Healthcare Coverage Decisions Across Western Europe

Background: Across Western Europe, procedures and formalised criteria for taking decisions on the coverage (inclusion in the benefits basket or equivalent) of healthcare technologies vary substantially. In the decision documents, which display the justification of, the rationale for, these decisions, national healthcare institutes may employ ‘contextual factors,’ defined here as situation-specific considerations. Little is known about how the use of such contextual factors compares across countries. We describe and compare contextual factors as used in coverage decisions generally and 4 decision documents specifically in Belgium, England, Germany, and the Netherlands.

Methods: Four group interviews with 3 experts from the national healthcare institute of each country, document and web site analysis, and a workshop with 1 to 2 of these experts per country were followed by the examination of the documents of 4 specific decisions taken in each of the 4 countries, sampled to vary widely in type of technology and decision outcome.

Results: From the available decision documents, we conclude that in every country studied, contextual factors are established ‘around the table,’ ie, in deliberation. All documents examined feature contextual factors, with similar contextual factor patterns leading to similar decisions in different countries. The Dutch decisions employ the widest variety of factors, with the exception of the societal functioning of the patient, which is relatively common in Belgium, England, and Germany. Half of the final decisions were taken in another setting, with the consequence that no documentation was retrievable for 2 decisions.

Conclusion: First, we conclude that in these countries, contextual factors are actively integrated in the decision document, and that this is achieved in deliberation. Conceptualising contextual factors as both situation-specific and actively-integrated affords insight into practices of contextualisation and provides an encouragement for exchange between decision-makers on more qualitative aspects of decisions. Second, the decisions that lacked a publicly accessible justification of the final decision document raised questions on the decisions’ legitimacy. Further research could address patterning of contextual factors, elucidate why some factors may remain implicit, and how decisions without a publicly available decision document may enable or restrain decision-making practice.

The reimbursement of new medical technologies in German inpatient care: What factors explain which hospitals receive innovation payments?

Most hospital payment systems based on diagnosis-related groups (DRGs) provide payments for newly approved technologies. In Germany, they are negotiated between individual hospitals and health insurances. The aim of our study is to assess the functioning of temporary reimbursement mechanisms. We used multilevel logistic regression to examine factors at the hospital and state levels that are associated with agreeing innovation payments. Dependent variable was whether or not a hospital had successfully negotiated innovation payments in 2013 (n = 1532). Using agreement data of the yearly budget negotiations between each German hospital and representatives of the health insurances, the study comprises all German acute hospitals and innovation payments on all diagnoses. In total, 32.9% of the hospitals successfully negotiated innovation payments in 2013. We found that the chance of receiving innovation payments increased if the hospital was located in areas with a high degree of competition and if they were large, had university status and were private for-profit entities. Our study shows an implicit self-controlled selection of hospitals receiving innovation payments. While implicitly encouraging safety of patient care, policy makers should favour a more direct and transparent process of distributing innovation payments in prospective payment systems.

Barriers and facilitators of patient access to medical devices in Europe: A systematic literature review

A large number of medical devices (MDs) is available in Europe. Procedures for market approval and reimbursement have been adopted over recent years to promote accelerating patient access to innovative MDs. However, there remains uncertainty and non-transparency regarding these procedures. We provide a structured overview of market approval and reimbursement procedures and practices regarding access to MDs in the EU. Market approval procedures were found to be uniformly described. Data on reimbursement procedures and practices was both heterogeneous and incomplete. Time to MD access was mainly determined by reimbursement procedures. The influence of the patient on time to access was not reported. Prescription practices varied among device types. Barriers to and facilitators of early patient access that set the agenda for policy implications were also analyzed. Barriers were caused by unclear European legislation, complex market approval procedures, lack of data collection, inconsistency in evidence requirements between countries, regional reimbursement and provision, and factors influencing physicians' prescription including the device costs, waiting times and hospital-physician relationships. Facilitators were: available evidence that meets country-specific requirements for reimbursement, diagnosis-related groups, additional payments and research programs. Further research needs to focus on creating a complete overview of reimbursement procedures and practices by extracting further information from sources such as grey literature and interviews with professionals, and defining clear criteria to objectify time to access.

Regional regulators in health care service under quality competition: A game theoretical model

In several countries, health care services are provided by public and/or private subjects, and they are reimbursed by the government, on the basis of regulated prices (in most countries, diagnosis-related group). Providers take prices as given and compete on quality to attract patients. In some countries, regulated prices differ across regions. This paper focuses on the interdependence between regional regulators within a country: It studies how price setters of different regions interact, in a simple but realistic framework. Specifically, we model a circular city as divided in two administrative regions. Each region has two providers and one regulator, who sets the local price. Patients are mobile and make their choice on the basis of provider location and service quality. Interregional mobility occurs in the presence of asymmetries in providers' cost efficiency, regulated prices, and service quality. We show that the optimal regulated price is higher in the region with the more efficient providers; we also show that decentralisation of price regulation implies higher expenditure but higher patients' welfare.

Contextual Factors Influencing Cost and Quality Decisions in Health and Care: A Structured Evidence Review and Narrative Synthesis

BACKGROUND

Decisions affecting cost and quality are taken across health and care but investigation of the mediating role of context in these is in its infancy. This paper presents a synthesis of the evidence on the contextual factors that influence 'decisions of value' - defined as those characterised by having a significant and demonstrable impact on both quality and resources - in health and care. The review considers the full range of resource/quality decisions and synthesises knowledge on the contextual drivers of these.

METHODS

The method involved structured evidence review and narrative synthesis. Literature was identified through searches of electronic databases (HMIC, Medline, Embase, CINAHL, NHS Evidence, Cochrane, Web of Knowledge, ABI Inform/Proquest), journal and bibliography hand-searching and snowball searching using citation analysis. Structured data extraction was performed drawing out descriptive information and content against review aims and questions. Data synthesis followed a thematic approach in accordance with the varied nature of the retrieved literature.

RESULTS

Twenty-one literature items reporting 14 research studies and seven literature reviews met the inclusion criteria. The review shows that in health and care contexts, research into decisions of value in health and care is in its infancy and contains wide variation in approach and remit. The evidence is drawn from a range of service and country settings and this reduces generalisability or transferability of findings. An area of relative strength in the published evidence is inquiry into factors influencing coverage and commissioning decisions in health care systems. Allocative decisions have therefore been more consistently researched than technical decisions. We use Pettigrew's (1985) distinction between inner and outer context to structure analysis of the range of factors reported as being influential. These include: evidence/information, organisational culture and governance regimes, and; economic and political conditions.

CONCLUSION

Decisions of value in health and care are subject to range of intersecting influences that often lead to a departure from narrow notions of rational decision-making. Future research should pay greater attention to the relatively under-explored area of technical, as opposed to allocative, decision-making.

The determinants of medical technology adoption in different decisional systems: A systematic literature review

Studies of determinants of adoption of new medical technology have failed to coalesce into coherent knowledge. A flaw obscuring strong patterns may be a common habit of treating a wide range of health care innovations as a generic technology. We postulate three decisional systems that apply to different medical technologies with distinctive expertise, interest, and authority: medical-individualistic, fiscal-managerial, and strategic-institutional decisional systems. This review aims to examine the determinants of the adoption of medical technologies based on the corresponding decision-making system. We included quantitative and qualitative studies that analyzed factors facilitating or inhibiting the adoption of medical technologies. In total, 65 studies published between 1974 and 2014 met our inclusion criteria. These studies contained 688 occurrences of variables that were used to examine the adoption decisions, and we subsequently condensed these variables to 62 determinants in four main categories: organizational, individual, environmental, and innovation-related. The determinants and their empirical association with adoption were grouped and analyzed by the three decision-making systems. Although we did not identify substantial differences across the decision-making systems in terms of the direction of the determinants' influence on adoption, a clear pattern emerged in terms of the categories of determinants that were targeted in different decision-making systems.