cadth_2014_e1_sharing_risk_between_payer_and_provider_by_leasing_health_technologies__christopher...
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Sharing risk between payer and
provider by Leasing Health
Technologies Christopher McCabe PhD
University of Alberta
Overview
Background
Health care as an investment
Leasing health technologies
Worked example: Leasing Herceptin
Leasing, value based pricing and only in
research
Conclusions
Background
Decision choices widening
Health care as an investment
"In this world nothing can be said to be certain,
except death and taxes.” Benjamin Franklin, 1789
“Uncertainty as to the quality of the product is
perhaps more intense here than in any other
important commodity.” Kenneth Arrow (Nobel Laureate).
Welfare Economics of Medical Care. AER 1963
Reimbursement as an Investment
Leasing as a response to uncertainty
Leasing health care
Paying for health delivered
Calculating lease payment
Price associated with target cost
effectiveness threshold
Time horizon for duration of beneficial
effect
Number of monitoring periods during the
time horizon
Leasing Herceptin
When Herceptin was funded for Early
Breast Cancer in UK we had direct
evidence for 48% of parameters in the
decision model.
There was @ 35% chance Herceptin
displaced more health than it produced.
Long delay to break even as an
investment.
Net Benefit Probability Map: Herceptin: 19.5 years to break even point.
Range plus 0.97 QALYs per person to minus 0.28 QALYs per person
Price of Herceptin: £21,184
Duration of benefit (DFS) = 10 years
Annual Review
Interest rate = 3.5%
Lease payment: £2,118.4
Net Benefit Probability Map with Leasing: Break even point = 5 years. ICER =
£17,347, Net Benefit range at 50 years = plus 0.82 to minus 0.16
Leasing, value based pricing and only
in research Innovation by definition is highly uncertain
◦ Reduces the likelihood of unrestricted funding
◦ Increases the likelihood of Only in Research
Value based pricing innovation premium
proposed to remedy this „disadvantage‟.
◦ UK social research reports limited public
support for this; (Brazier et al.
http://www.eepru.org.uk/VBP%20survey%20research%20report.pdf)
Decision choices widening
TLRS
TLRS
Technology Leasing modifies the risk associated with innovative technologies ◦ Reducing value of delaying research
◦ Reducing the time to break even
◦ Increasing the probability of a positive reimbursement decision.
Provides greater rewards for technologies that perform better than expected.
For highly uncertain technologies; only in research may still be the efficient decision option.
Conclusion
Few conventional risk sharing schemes
have successfully protected limited health
care budgets from inefficient use.
Innovative payment schemes managing
risk at the patient level are required.
Technology leasing is one model for
sharing risk between innovator and health
system at the patient level.
Thank you.
@McCabeCJM
Questions