How to navigate in the new world of price cuts in Europe? - Where did the money disappear? Prepared for: From: Mattias Kyhlstedt CEO [email protected] SYNERGUS 1 May 9, 2013 Agenda Intro to Synergus Common issues across Europe Financial realities DRG s Health Economics HTA s Country specific examples: France Germany 2 Synergus Services The toolbox Planning & Strategy For reimbursement and health economics professionals who know how to use the tools and knowledge. Services that help to plan and to develop a strategy for your specific situation; providing a blueprint for what needs to be done. 3 Execution Where the rubber hits the road and we do the hands-on work to create the change. Synergus - Pan European Market Access Support Reimbursement & Health Economics 4 Copyright © Synergus Synergus Global Regulatory Support Regulatory Quality Systems (specialist in SW) 5 Historical view... Procedure code application DRG change Optimally adapted DRG Interim funding Develop market access strategy? Willingness to treat Willingness to endorse Sales Willingness to Champion Time 6 Copyright © Synergus Today s reality Procedure code application DRG change Optimally adapted DRG Interim funding Conditional willingness to pay Develop market access strategy? Willingness to pay Sales AND Willingness to treat Clinically and economically accepted treatment Willingness to endorse Willingness to champion Time 7 Copyright © Synergus 1, Who is willing to pay for my product? 2, How will I get there? 8 What Activities are Needed to create funding and reimbursement? Initial Period of No or Insufficient Funding Transitory Period of Temporary Funding No of Procedures 80 70 60 50 40 30 20 10 9 Copyright © Synergus Established Sustainable Funding Make smart products that reduce cost in health care and improve outcomes with meaningful difference !? 10 The challenge of funding & reimbursement 11 Who Is Going Broke? Healthcare Cost as a % of GDP Healthcare Cost Pressure Source: Authors calculations based on Laurence Kotlikoff and Christian Hagist, Who s Going Broke? National Bureau of Economic Research, Working Paper No. 11833, December 2005, p.29. 12 Copyright © Synergus Most medical devices do not have any reimbursement issue! 13 European Reimbursement: A Snapshot of Some Healthcare Systems UK Belgium Denmark 152 Primary Care Trusts 1 centralized system 5 Counties 105 Foundation Trusts Device specific reimbursement High decision making at hospital level (global budget) 10 Strategic Health Authorities (England) HRG (DRG) Prospective payment system Germany 16 counties 134 public & 43 private sickness funds France Public & Private decision making High decision making power at hospital level centralized G-DRG prospective payment system DRG (T2A) system prospective payment system Device specific reimbursement Italy Spain 21 local health authorities 17 autonomous regions High decision power at regional level High decision making power at hospital level (global budget) DRG prospective payment system 14 Copyright © Synergus DRG A system to distribute healthcare funds Demands on healthcare are increasing (e.g. with age) Amount is fixed Good distribution from a healthcare/payer perspective: - is fair for small and big hospitals - does support efficiency gains => less costs for produced healthcare - has the ability to introduce innovations 15 Copyright © Synergus Reimbursement vs. Funding Reimbursement Funding vs. The system through which hospitals are The willingness to pay for the activities in being paid for performance (activities the hospital DRGs) Example: Example: Gastric Banding Guidelines state that patients with BMI Either there is a DRG that describes this above 40 should receive gastric banding. activity with corresponding value or not. However local decisions-makers in UK only If not, the hospitals will not receive payment want to fund for patients with BMI above for their activities. BMI 60 Depending on the country, for the product, one or both issues might be a challenge. (In this presentation the word Reimbursement will represent both dimensions.) 16 Copyright © Synergus DRG Systems Can be used for budgeting or financing Purpose is to provide relevant clinical description of activities that are carried out with appropriate reimbursement of cost Does not care about the technology utilised Updates of the system will occur if new methods (from a DRG-perspective) are introduced Typical timeframe to change DRG-system is 3-5 years Reimbursement levels are based on historical cost data 17 Copyright © Synergus DRG Systems cont. DRG Systems 18 Copyright © Synergus Is the Reimbursement System Likely to be Adapted to Accommodate Your Technology? Interim funding System-change possible Understanding pathway for change Implementation of system-change Favourable tariff System-change not possible Unfavourable tariff Market Opportunity? 19 Copyright © Synergus Market access hurdles & opportunities? Required Tools & Actions? Recognise the Opportunities and Limitations in the Reimbursement Systems 20 Copyright © Synergus Main types of reimbursement routes / challenges Change DRG-system Reported volume in system, difference in procedure, costdifference Product registrations Require evidence about comparative effectiveness HTA evaluations No change in system Work within exisiting system. 21 Copyright © Synergus Who Cares? 22 Stakeholder Mapping Who are the relevant stakeholders and their influence on decision-making? Conceptual example How to establish a provisional budget? Department Head What is the hospital purchasing Purchas process? -ing What does the physician need to justify his case? Physicians What is required to convince the management? Market Access Action Plan? Hospital Managament HTA XXXXXXXXXXXXXX XXX Clinical Society 23 Copyright © Synergus Opportunity or threat? Hurdles for New Innovative Technology Affordability Cost-Effectiveness Quality Efficacy Economic and Budgetary issues Safety Clinical Methodological Design issues 24 Copyright © Synergus Economic and Budgetary Issues Value for Money Cost-Effectiveness Impact on Budget Affordability 25 Copyright © Synergus Economic Evaluation: Basic Principle The comparative analysis of alternative courses of action in terms of both their costs and consequences in order to assist policy decisions (Drummond et al) Always comparative analysis Comparison of both costs and Consequences Consequence A Cost A Intervention A Choices Pain free hours Consequence B Cost B Intervention B Pain free hours Cost B - Cost A Comparison* = Incremental Cost Effectiveness Ratio (ICER) Effect B - Effect A ICER should be below the Willingness-To-Pay of each payer (e.g. in UK it is 30,000 £ / QALY) *Assuming B as a new intervention and having more costs and effects 26 Copyright © Synergus Reimbursement Potential: Which Quadrant? WTP £35 000 Cost Reimbursed but may require alternative funding Reject WTP £25 000 Higher cost lower benefit (High Likelihood of Rejection) High certainty of Reimbursement Benefit (QALY) Lower cost & Lower benefit (may or may not be reimbursed, depends on clinical endorsement) Highest certainty of Reimbursement WTP = Willingness To Pay or Cost Effectiveness Threshold (e.g. In UK £25 000 27 Copyright © Synergus £35 000) From Back of the Envelope to Rigid Support Documentation Market Access Strategy Market-Need Evaluation Comparator Evaluation Value Proposition Strategy Evidence Evaluation & Strategy Value Communication Strategy Clinical Landscape (Guidelines, etc) Review Stakeholder Perception Analysis Budgetholder Implications Budget-Impact Analysis Funding Pathways Analysis Reimbursement Evaluation Value-Based Pricing Analysis Reimbursement & Pricing Strategy 28 Copyright © Synergus Value Proposition - Starting At the Back of The Envelope Current clinical pathway Biomarker New clinical pathway New Biomarker 10 CT-Scan Ultrasound Ultrasound Surgery Surgery Cost: 3000 Cost: 2500 29 Copyright © Synergus 210 HTA In EU Decision Making Model Topic Selection Decision makers Ministry, Autonomous bodies, Providers, Payers etc. Appraisal / Review e.g. IQWiG, HAS, NICE, DACHETA or by independent reviewers research groups, universities etc. Manufacturer s submission with some exceptions, assessment and appraisal are conducted following a manufacturer s application. - European Observatory for Health Policy Supervision Policy recommendation bodies Government Parliament Politicians Final Decision Dotted box = HTA in Decision making process Ref. 30 Health Technology Assessment and Health Policy-Making in Europe, Marcial Velasco Garrido, Observatory studies Series no. 14, European Observatory for Health Policy Publication, ISBN 978 92 890 4293 2 Copyright © Synergus What Health Technology Assessment organizations (HTA) look for? What HTA Authorities look for? Cost effectiveness Clinical / Therapeutic Value Budget Impact Available Alternatives Public Health Impact 31 Copyright © Synergus All based on highlevel published evidence High quality evidence is required Typical threshold for inclusion in evaluation 32 Oxford Centre for Evidence-Based Medicine Copyright © Synergus Country specific examples Germany France 33 changing the DRG-system Regsitration of a product Reimbursement Pathways - Inpatient Covered sufficiently by G-DRG Yes No OPS-change (DIMDI) No DRG with fixed cost-weight Has cost data been reported Innovation Funding Yes DRG-change (InEK) Uneven distribution Additional funding ZE Even distribution Regrouping of DRG InEK Evaluation (NUB) New/split DRG Negotiation Sickness fund Negotiation Healthcare provider Sickness fund Healthcare provider Reimbursement (1 year) Reimbursement 34 Copyright © Synergus Reimbursement Funding System - Inpatient Activity based financing system for hospitals Diagnosis Code ICD-10-GM Version 2013 (~13400 in 2013) Indications e.g. age, LOS, sex, type of admission. DRGs include: Medical treatment Nursing care Board and accommodation Provision of pharmaceuticals and medical devices Therapeutic appliances including all overhead Procedure Code OPS (~28300 in 2013) Grouping (+ indications) In addition to DRGs there is the option to apply for innovation funding, called NUB. For certain specific procedures and treatment there may be established supplementary payment called Zusatzentgelt (ZE). DRG G-DRG (1187 in 2013) Tariff; Base-rate is negotiated regionally and updated every year. Calculated as the DRG cost weight multiplied by the regional base-rate Reimbursement The national base-rate for 2013 is set at 3068.37 . Until 2014 the regional base-rates must move closer to the national rate and deviate no more than +2,5 % or -1,25 %. DRGs list which treatments (including medical devices) that can be provided to patients. DRGs are meant to cover all costs that arise from a certain medical procedure costs are instead financed by the regions (states/länder). apart from investment costs (capital equipment). Those Medical device prices are negotiated between the hospital and the respective medical device manufacturer. 35 Copyright © Synergus Adaptation of G-DRG System Observe outcome end of January Market Access Request for DRGregrouping / ZE 31st March NUB NUB Apply for NUB until 31st October, annually NUB Procedure Code (OPS) Report: New OPS Apply for OPS until 28th February 2013 2014 Observe outcome end of August 2015 Data Analysis DRG / ZE 2016 2017 If procedure codes, DRGs and ZEs will be granted, they will be usable from the 1st January on (therefore the gradient colouring). 36 Copyright © Synergus Innovation Funding - Inpatient Neue Untersuchungs- und Behandlungsmethoden (NUB) Alternative pathway for Only initiated by Manufacturer Healthcare provider InEK Re-application possible next year Deadline: October 31st Decision: January 31st review application Approval No Facts of NUB Arrangements Re-application needed each year Only applicable for those hospitals that apply Only ~15% in 2013 Yes Healthcare Provider Local Sickness Funds Negotiation Reimbursement for 1 year Hospital specific; additional to the existing tariff 37 Copyright © Synergus Some Success Factors for NUB Arrangements Understanding the criteria for approval Ability to appropriately answer the questions Submitting hospitals Criteria for NUB Arrangements Novelty (< 5 years) Suitable patient group Significantly higher costs (labor and material costs) NUB is an Add-On to Existing Payment in DRG-System NUB DRG NUB ZE DRG DRG 38 Copyright © Synergus Understanding the German NUB Solution The objective is to provide an interim funding solution until the DRG-system has adapted The application is submitted by individual hospitals in October The decision is based on the review of the group of applications by InEK If the group of applications is granted status 1 , it gives the applying hospitals the possibility to negotiate with the insurance companies The NUB status is valid for one year Until there is an established solution in the DRG-system, a new application should be submitted annually 39 Copyright © Synergus NUB Process Preparation Submission Approval/Rejection Development of application master document based on a set of questions that have been defined by InEK (Institute for the Hospital Remuneration System), concerning the technology/treatment, patient population, costs etc. Applications are submitted to InEK using a computer program. NUB Status 1 Criteria fulfilled. Hospitals that applied for the NUB are allowed to negotiate reimbursement with sickness funds. Only hospitals/physicians can submit the applications. An application may be collaborative, so that one hospital submits the application on behalf of other hospitals of the same hospital network. NUB Status 2 Criteria not fulfilled. NUB Status 3 InEK was unable to process the application. NUB Status 4 Insufficient information/description of treatment. October 31st January 31st Note: NUB Status 1 only gives hospitals the possibility to negotiate reimbursement with the sickness funds and does not mean that it will be reimbursed automatically without effort. If an NUB is approved (status 1), for which hospitals does it apply? If a technology is granted NUB status 1, all hospitals that have applied for that particular technology (and only those) are allowed to negotiate reimbursement with the sickness funds. 40 Copyright © Synergus French example 41 Device Funding & Reimbursement Mainly Organized at a National Level with a Focus on Clinical Effectiveness The T2A (La Tarification à l Activité) is the French activity-based hospital financing system which is similar to other DRG (Diagnosis-Related Group) systems. Covered sufficiently by GHM? Medical Procedure HTA (SEAPCNEDiMTS) No Yes Covered by GHM, but has to be on LPPR CCAM-change (Ministry of Health) LPPR GHM-change (Ministry of Health) Professionals Unions New/split GHM PHRC STIC Medical Device HTA (SED-CNEDiMTS) Price negotiation Price negotiation UNCAM Innovation Funding CEPS Medical Device Manufacturer Ministry of Health Coverage (LPPR) Fast Track Procedure (Ministry of Health decision, no direct application possible) Ministry of Health Art. L165-1-1 CSS Reimbursement 42 CCAM, Classification Commune des Actes Médicaux (procedure code classification); GHM, Groupe homogène de malades (DRG); GHS, Groupe Homogène de Séjour (DRG tariff); UNCAM, Union nationale des caisses d'assurance maladie; CNEDiMTS, Commission Nationale d'Evaluation des Dispositifs Médicaux et des Technologies de Santé; SEAP SED LPPR, Liste de Produits et Prestations Remboursables; PHRC, Programme hospitalier de recherche Clinique; STIC, Soutien aux techniques innovantes et coûteuses Criteria for eligibility for LPPR inclusion: Statistical criteria (degree of heterogeneity within the cost distribution that would result from the integration of the product within the GHM). Medical criteria (strong innovation supported by clinical evidence). Economic criteria (highcost devices supported by cost-effectiveness (CE); new rule: CE-study should be done in order to aim towards ASA [expected benefit improvement or added clinical value] 1, 2 or 3) New Fast procedure: Track Grant reimbursement for whole package (medical device + procedure + medical fees) Limited period and in a restricted area (set by Health Ministry) Applicable since March 1st of 2010 Copyright © Synergus Hospital Reimbursement System Hospitals are reimbursed by T2A, an activity-based financing system consisting of GHMs (Patient Homogeneous Groups, equivalent to DRGs). Each GHM code could correspond to one or more GHS codes (Hospital Stay Related Group) based on clinical intervention profiles. Each GHS has a fixed GHS Tariff which allows for the reimbursement in form of lump sum payment for both in-patient care, and out-patient care (day-hospitalization). ICD-10 (CIM-10) (Diagnosis code ~14400) Grouping (+ indications) GHM Code GHS Code Fully implemented in; 2005 for the private for-profit hospitals 2008 for the public hospitals and private non-profit hospitals CCAM (Procedure code ~8000) DRG GHM (~900) Tariff GHS (~2300) Select Patient characteristics: Associated Comorbidities or Complications (CMA) Age Lenght of stay Others i.e. sex, type of admission Salaries are excluded for the private market Potentially Additional reimbursement for some implantable devices via LPPR Total Reimbursement 43 Copyright © Synergus Public hospitals are harmonized with the private sector, in terms of similar financing systems (e.g. procedures, services and products). Adjustments of the tariffs occur every year. Main differences between inpatient and out-patient care would be in the length of stay (LOS). The reimbursement tariff varies according the severity of the case and the LOS. Going through LPPR to Gain Reimbursement Implies both a Clinical and Budget Impact Evaluation Clinical and technical dossier Any similar device on LPPR Can be given by any European Notified Body CEmark 1 Required for the monitoring of MD market Communication ANSM (former AFSSaPS) Simultaneous submission to HAS and CEPS Only for brand name pathway Submission to HAS Evaluation by the CNEDIMTS/SED 4 Brand name pathway SA sufficient Submission to CEPS Reimbursement Application 3 2 ~398 days (vs. 180 days in theory) 1. Notification about launch of medical device on French market 2. Declaration of the LPPR codes intended to be used (after inclusion in ANSM list) Generic description pathway Application ANSM * CEPS activity report 2009 Sources: CEPS, ANSM, HAS Copyright © Synergus Evaluation by CEPS Based on the advisory opinion of CNEDIMTS (takes ~90 days) Based both on the evaluation by the CNEDIMTS and by the CEPS SA not sufficient STOP Economic dossier If some similar device already exists on the LPPR Average period in 2009 between Submission and Publication in the JORF* 44 Evaluation of the expected public health benefit (takes ~90 days) 5 Manufacturer Decision by the Ministry of health Publication in the JORF then Registration on LPPR 6 7 Application for Inclusion on the LPPR List LPPR: Generic Code or Brand Specific Code? In order for the product to be reimbursed separately, the product must be listed on the LPPR List. For listing on the positive reimbursement list, LPPR, manufacturers have the following alternatives: 3 Generic LPPR Code Brand Specific LPPR Code or This option applies if: 1) There is an existing generic LPPR code that is appropriate for the device 2) The existing generic LPPR code renders reimbursement that is enough to cover the cost of the device. This option applies if: 1) No existing generic LPPR codes are appropriate for the device 2) The product is innovative or specific: monitoring of the product is required 3) A higher price is requested; in this case the device must show substantial clinical and economic value to justify a higher price Application for a Brand Specific LPPR code is more extensive than an application for a Generic LPPR code. 45 Copyright © Synergus LPPR Application Brand Specific LPPR Code (1/3) Reimbursement Pathway When no existing generic LPPR code adequately describes the device, manufacturers may apply for a new LPPR code. In order to achieve superior reimbursement, the product must show substantial clinical and economic benefits. Process Dossier should be prepared based on an LPPR template. Once the dossier has been prepared, it should be sent to: Manufacturer file (clinical and technical part) must be provided to the CNEDiMTS1 directly or by post mail Clinical and economic part of the application file must be sent at the same time to CEPS 2 Fee Registration fee: 3220 Renewing inscription fee: 644 Modification of inscription conditions fee: 644 1 CNEDiMTS 46 = Commission nationale d évaluation des dispositifs médicaux et des technologies de santé visés à l'article L.165-1 du code de la sécurité sociale 2 CEPS = Comité Economique des Produits de Santé Copyright © Synergus LPPR Application Brand Specific LPPR Code (2/3) Content for LPPR application dossier (1/2) 1. Clinical and technical dossier Administrative data History of development, marketing, and reimbursement of the product Associated procedure codes, if applicable Proof of the Actual Benefit (SA1), claimed by the applicant (description of the product benefit and of the current strategy, impact on the public health, risks and adverse effects); can result in SA No SA Level of scientific evidence for published data Level 1 Randomised controlled trials of high power (low alpha and beta risks) / Meta-analyses Level 2 Randomised controlled trials of low power (high alpha and beta risks) Level 3 Non randomised prospective comparative studies or Cohort or prospective studies Level 4 Comparative studies with historical series or studies containing bias Level 5 Case series or retrospective studies Demonstration of the Improvement in Added Clinical Value (ASA2) claimed by the applicant Proposed comparator Level of Added Clinical Value (ASA) Description of endpoints used to assess ASA I. Major improvement Level of ASA with justifications II. Substantial improvement Demonstrations of ASA III. Moderate improvement Target population IV. Minor improvement Recommendation on conditions of prescription and use V No improvement 1 47 2 SA: service attendu (expected actual benefit) ASA: amélioration du service rendu (expected benefit improvement or added clinical value) Copyright © Synergus LPPR Application Brand Specific LPPR Code (3/3) Content for LPPR application dossier (2/2) 2. Summary sheet for the clinical and technical dossier (must be attached in appendix). 3. Summary tables for key studies and summary of medical device vigilance data (must be attached in appendix) 3. Other documents that need to be provided: Statement of compliance with European Directive 93/42/EEC for all medical devices CE marking certificate Leaflet and instruction for use of the medical device Technical sheet for the product Any certificates that confirm the compliance with standards, specifications, tests or analyses. 5. Copy of publications mentioned in the dossier 48 Copyright © Synergus Evaluation Process LPPR Application (1/2) Once the dossier has been submitted, the following steps apply: 4 Evaluation by CNEDiMTS (normally within 90 days) The significance of the product or service with regards to: therapeutic or diagnostic effect or compensation for a disability as well as undesirable effects or risks linked to its use; the role of the product or service in therapeutic or diagnostic strategy or compensation for a disability, taking other available therapeutic or diagnostic methods or means to compensate for the disability into account Its expected public health benefit: impact on the health of the population (mortality, morbidity and quality of life, its ability to fulfill a therapeutic or diagnostic need or to compensate for a disability), impact on the health service and impact on public health policies and programs. CNEDiMTS gives a final advisory opinion if Actual Benefit (SA) is sufficient or not. If Actual benefit is NOT sufficient = End of the reimbursement application. A new application is possible when the manufacturer brings further evidence. If the Actual Benefit is sufficient, there follows an evaluation of the Added Clinical Value (ASA) in relation to a comparable product, procedure or service, considered to be the current gold standard according to available scientific data. The ASA is rated on a scale of 1-5 (with 1 being the highest). Although the Ministry of Health makes the final decision on reimbursement, the CEPS makes tariff proposals based on the recommendations by CNEDiMTS, taking the SA and ASA into account as well as tariffs/prices of comparable products, procedures and services on the list and anticipated volumes. For products with an ASA rating of 5 in particular (i.e. no ASA), the Social Security Code specifies that products that do not provide any improvement in actual benefit or economy related to the cost of the treatment, or which is likely to involve unjustifiable expenditure to the national health insurance, cannot be included in the LPPR. 49 Copyright © Synergus Evaluation Process 5 LPPR Application (2/2) Evaluation by CEPS (normally within 90 days) CEPS is the governmental body responsible for the pricing of health products on the LPPR before registration The price of the device in other markets and economic studies (budget impact analysis) will be taken into consideration A correlation between price and sale volume will be agreed with the manufacturer (price reduction if the forecast sale volume is exceeded) Pricing of Medical Devices The price will be set after negotiation between manufacturers (or their representatives) and the CEPS according to: The actual benefit and level of ASA Tariffs of similar products or services registered in the LPPR The forecast number of devices sold each year The real conditions of use will be taken into consideration European prices should not be taken into consideration because of constraints linked with different distributors 6 7 Decision by the Ministry of Health Based both on the advice opinion of CNEDMITS and the evaluation by CEPS Registration on LPPR and Publication in the Official Journal of the French Republic Publication date = start of the reimbursement Registration valid for 5 years maximum: every five years, CNEDIMTS evaluates again the public health benefit (SA) of the device and its added clinical value (ASA) to decide whether the device should be removed from the LPPR or not 50 Copyright © Synergus Reimbursement and market access is challenge is an art that requires: - Understanding of how to introduce new therapies - Knowledge and understanding about - the different national process to establish reimbursement - Health Economics 51 Therapy Development & Reimbursement A multi-disciplinary approach Physicians / Providers Payers / Government Clinical evidence Clinical guidelines Budget Impact Analysis Cost & Cost Minimization Referring Physicians Health Technology Assessment Comparative Effectiveness Health Economics Incremental Cost-Effectiveness Implanting physicians Key Opinion Leaders Department Heads Hospital Management Procurement Commissioner Payer / Insurance Policy Maker Therapy Selling Customer Relationship Management Value Added Selling Economic Outcome Selling Health Economics knowledge 52 Copyright © Synergus
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