Keuzevak - Rationing Healthcare Flashcards
Rationing definition of Breyer
To limit the beneficial health care an individual desires by any means - price or non price, direct of indirect, explicit or implicit
- Limit beneficial healthcare
- price or non price;
- direct or indirect; direct (have certain criteria for treatment) indirect; limited resources such as doctors and waiting lines
- Explicit or implicit; explicit different things not included, implicit natural contraints
Other view of rationing definition - Maynard 1999
Rationing takes place when an individual is deprived of care which is of benefit (in terms of improving health status, or the length and quality of life) and which is desired by the patient
- More focus on the deprivation
- Broad benefit
Why rationing is neccesary
- healthcare spending; Large part of GDP, can not continue
- Life expectancy; longer living and requiring more resources, but limited, to whom we give them?
- World wide worries; waiting, copayments, not all treaments covered in collective insurance
- Culture; differences in priority in healthcare; transparency or solidarity
Scarcity
People want always more than the resources allow us to satisfy us all, lead to choice
- In healthcare; increasing spending
Difficult in how to limit consumption of health care and on what basis; waiting times Individual cases
economics concerned with
Efficient allocation of scarce resources over alternative uses (opportunity costs) and equity implications
Opportunity costs
The worth of the not chosen alternative
- Inside healthcare; more means something less for other patients
- outside healthcare; less education, less infrastructure etc
Equity
Fair distribution of resources to those who need it the most
Efficiency
Maximizing wellfare (hapiness) given a budget
Equity and efficiency
Go hand in hand and can not be solved independently
Utility is gained when:
- Utility is gained by buying and consuming goods at a price at or below what they are willing to pay from profit-maximizing firms without market power selling at a price they are willing to accept (equal to marginal costs)
Optimality in markets
- Individuals maximize own utility (best judges welfare)
- Perfect knowledge about price and characteristics
- Income distribution determines purchasing power
2 ways value of good
- Determined by income (value less because you have less)
- Determined by preferences
Why healthcare not an optimal market
- Uncertainty and consequences of insurance (moral hazard)
- Information assymetry; credance good
- Existance of externalities; Market doenst reflect the true societal costs –> covid, must take into account more external costs
Equity and efficiency balance; allocation and rationing job of the government
Price and non price rationing (breyer 2013)
- Decide if you consume on price or not; price rationing
- Decide on other things if you consume (waiting times or professional judgement); non price rationing)
Government regulation; not all price mechanisms but also priority, to allocation of healthcare
Ethical argument against health economics
- We must do anaything possible for the patient no matter what the cost, because health is more worth than money
But; resource constraint system cost means sacrifice
In this case the value of benefits foregone by the person who did not get treated
- Consider what we could have done with the spending
First lesson of economics
First lesson of politics
- There is scarcity
- Disregard the first lesson of economics
Tension between what we can do and what is ideal
- We ration because of opportunity costs; the same resources can produce more health/wellbeing elsewhere
Inconsistent triad of Weale 1998
Basic healthcare principles
- Comprehensive
- High quality
- to all citizens
Given scarcity not all wishes at the same time; must face oppertunity costs when investing in health
- Inside healthcare
- Outside healthcare
Breyer need or benefit is related to
- An immediate danger or life
- The risk of a severe and lasting health impariment
- Any even only temporary deterioration of health
Not a dichotomous variable, but continuous; context dependent if it is of benefit for society or a person
rationing aspects
Societal level decision
Not only cost containment also what is delivered
priority setting
Price vs non price rationing
- Price rationing; allocation of scarces resources through price mechanisms
- Non price rationing; allocation of limited resources below market price; free of charge
Non price rationing means also you leave it out of the system and not in BBP, up to private market
primary vs secondary rationing
primary rationing; how much budget to spent on healthcare (direct and indirect) and how to determine (what contributes more to societal level)
Secondary rationing; budget is there, how to use it (eg. priorization, waiting lists)
- Also natural scaricty resources such as transplantable organs
Narrow rationing
Non price rationing; no coverage in BBP leave it up to market resulting in private market and price rationing
implicit vs explicit rationing
Implicit; a budget and limits to resources, but no procedures on how to spend it
- Cost budget and allocate it
- choices left to stakeholders in system (bedside rationing;)
Explicit; sets limits to resources in combination with how choices should be allocated
- limiting BBP on criteria
- Breast cancer criteria for treatment
- Explicit who gets what and what not
implicit pro and cons
Cons
- Different outcomes at lower level decision makers; other choices (breastcancer)
- doubt if it contributes to outcomes
- Choices left to lower levels
Pro
- Discretionair room for stakeholders to spend (look at every patient)
- Use own expertise on how to make choices- provider autonomy
- Reduces public resistance; as there are no procedures (no rules so no harm)
bedside rationing
Choices within implicit rationing are often to lower decision makers targeted; explicit rationing on lower decision level
The process by which healthcare providers, particularly physicians, make real-time decisions about the allocation of limited healthcare resources while treating individual patients.
Explicit rationing pro and cons
Cons
- reduced acces to certain treatments because of rules, that maybe have been used in implicit rationing system
- potiental public resistance; why this included and other not
- Difficult so specify general rules
- Can you cover rules for everything?
Pros
- makes allocation transparent; provider and patients know what they qualify for
- distributed to maximize social welfare based on (CEA, outcomes etc)
soft and hard rationing
Soft rationing; if you cannot have it publicly, you can have the private market (dental care)
Hard rationing; If you cannot have it publicly you cannot have it elsewhere (organs)
demand side rationing
Often associated with explicit rationing; leaving supply unaffected only how to distribute
- consequence; not fund even when there is demand
- limited entitlements / coverage and copayments
supply side rationing
Often associated with implicit rationing; leaving demand untouched in a way
- Often waiting times and lists
US explicit, breyer indicates three topics
- Age; if older less priority?
- Novelty; medical innovation driver of costs of good?
- Cost effectiveness; maximizing welfare
US is implicit rationing
Healthcare goals and objectives
- Quality of care
- Access
- efficiency
- affordability
Explicit rationing proof
You can see if the choices that are made are in line with the goals
Oppertunity costs - Brouwer et al
Too expensive can only be anserwed by considering benefits and oppertunity costs
Two perspectives;
- costs within the health care sector; price of health forgone
- outside healthcare sector; other benefits (such as work)
Government and results
Market failure government has to steer towards better outcomes
Otherwise
- SID
- Moral hazard
Optimal level is debatable
Hurst typology
- Reimbursement model; you pay premium, declarate and get an reimbursement
- Contract model; consumer pays premium and insurer pays bills of provider
- Integrated model; consumer pays premium to insurer which is also the provider (england)
Can be combined with volunary and mandatory insurance
Consequences with voluntary insurance
problems with equity problems!
- adverse selection
- Payments; community based or riks related
Solution for equity is mandatory insurance; insuring universal access
Consequences with mandatory insurance
Reimbursement model is sensitive towards: efficiency
- SID
- moral hazard (efficiency harmed)
Integrated model;
- efficiency in a way of failures for waiting lines
Contract model; most promising in dealing with efficiency and equity
Convergence of contract model
- Use of government regulation (quality, universal coverage and acces)
- Own room that permits government arm length; competition mechanisms
Supply side rationing
restricts supply of care
- eg. budget contstraints, number of beds, limiting doctors (explicit)
- demand is left free
- Mostly integrated systems
- Mismatch between demand and the supply (excess demand)
Consequence; waiting lists
Demand side rationing
restricts demand of care
- restricts what is included in BBP
- deductables or copayments
- eg. limiting types of health care inverventions and copayments
- mostly contract and reimbursement models
- mismatch demand and supply (demand less)
- own choices may lead to suboptimal health affects
Dutch model
- Regulated competition
Contract model
- no strict budget but result of demand
rationing through
- Coverage in BBP
- mandatory deductible
- Copayments
Rationing aspectS
- Rationing is making choices between patients and treatments
- Rationing should be in line with goals of HC
- monitor effects of rationing
Consequences of rationing in dutch system at different levels
- Patient level; detoriation of health by waiting times
- society; inequities
- social environment; family affect - more costs less income
-health system; though choices, pressure and burden (waiting lists)
Supply side rationing thorough!!
Through a restriction of supply; budget, doctos beds
- Associated with implicit rationing!!
- Based on medical need
- Can offer limited servings
- system that is naturally restricted to serve people, leading to waiting
- Providers need to allocate resources bades on their medical need
Demand unthouched; mostly accesable without financial constraints
Two reasons why problem with untouched demand and cons
- Welfare loss; people value less than P* but mandatory to take a insurance; welfare loss
You need more supply to lower the prices; and minimalize welfare costs - If supply goes up, where does the money come from; budget expension and need to be found elsewhere–> inefficiency (oppertunity costs elsewhere more worth)
Waiting times
- waiting times result of more demand than supply
You can value healthcare low because of
- Preferences
- Low income
- Low information available; not able to judge own health
WTP < MC may still be socially desiarble; because of own judgements
- Require solidarity and subsidies
- social value =/ private value
Graph of supply side rationing
- fixed supply
- Demand left untouched
Reflect waiting prices & medical need
- Close to the fixed have a high waiting prices
- left is high medical need
System response is a referral system
Conceptual framework OECD waiting times
Private elective treatment; can speed up (not based on medical need)
- Higher waiting time more private sector
Outflow dependent on doctors, capacity private system and productivity
- How long to stay and influence potential need
-
If there is less waiting times
- Can result in unnecessary treatments
- Societal value might be lower than MC
Positive aspects of waiting times !!
- Reduced need of other mechanisms
- Waiting time functions as price (longer waiting induces demand)
- Principle works good for equity; demand is left untouched (low SES differences)
- Unnecessary care restricted; need judged by professional
- waiting times can reduce flow of referrals
- Waiting list can help to use available capacity optimal
Waiting time functions as price (longer waiting induces demand)
- Individual; not willing to wait long
- GP; raising the medical treshold; negative side effects of medical waiting is minimized
Waiting times and negative aspects!!
- QALy loss during waiting
- Recovery time can increase waiting time
- treatment less succesfull after waiting
- Higher medical costs to treating worse cases
- dissatisfaction of society of high waiting times
- costs of absence waiting for employers
- Differnences may induces cross-border care
waiting time optimallity
Waiting time is long enough to discourage demand and short enough to limit negative aspects from waiting
- But also a smaal financial barrier; otherwise demand to high
Problem optimal waiting times
- differs per disease, per situation, per indivdual, not only based on need somethimes
reduce waiting times mechanisms
- supply side extension; reducing contraints (budget and capacity), rewarding productivity Works! Resources matter
- Demand side reduction; less refferals, copayments
- Process and regulations; improving utilitzation facilities, maximum waiting times garantees, choice of provider
Lessons on waiting time mechanisms
- TIme costs; precieved costs of time waiting reduces the need for care
- Refined system; GP not pushing everyone to the second line but Medical need judgement
Dig harder than the sand is falling
- Reducing waiting times increased demand
- but also not the waiting times to long
We can dig harder than the sand is falling (not expanding waiting times)
- demand increased with supply but less (Martin and smith)
Siciliani and Hurst 2009
Increase in supply (doctors) does not result in more demand but reducing of waiting times
Why waiting times guarantees does not work?
- supply doens’t change
- After a year added to the medical need group
- Waiting time of high medical needs go up
Go elsewhere when having less waiting times
- Dont like traveling
- Shadows maybe quality
- Dont know doctor
Adverse incentives to reduce waiting lists
- Give hospitals with large waiting lists money for supply increase
- Profitable to have long waiting lists
- Somethimes waiting lists reduced but also demand increases again (Laeven et al. 2000)
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Alternative of effective waiting time management
Induce some competition through transparancy of waiting times
Raising clinical treshold of GP
GP dont refert to second line they do not know
Koopmanschap et al; effect of waiting times
- Figure 1; stable health, reversable effect
- Figure 2; deteriorating health, but reverasble effect ( back to normal)
- Figure 3; deteriorating health; reversable effect prolonged rehabilitation
- Figure 4; Deteriorating health, partly reversable
What should determine priority
- Age
- Forecast of health; how bad when not treated
- Cost effectiveness
- Work
- Culpability; fault eg smoking
- Reciprocity
- WTP
- Having dependents
Still SES differences in Supply side rationing
- higher SES know the system more and pressure when long delays
- Better social network
- May beter articulate need and wishes
- higher oppertunity costs and less room to take of work; more missed appointments
Full insurance
Under full insurance consumers do not experience the costs of care
- Incentivizing overconsumption
- Welfare losses
Moral hazard ex ante
Knowing being insured; behave differently
- less prevention
- More risk
Moral hazard ex post
Payed already an amount; use more care
- Demand more and more expensive care
Problems with moral hazard, consequences of overconsumption of care
More own payments
- Problems with equity, targets more among the poorer
Cost sharing
P* and Pcs
- own payments decrease wellfare loss
Not consuming care because of three things
- No medical need (assymetric information)
- No income
- Low valuation of healthcare (benefits lower than costs believed)
Assymetric information
People are not well informed about options and self diagnose of Healthcare but dependent
- Also problem for cost sharing; not choosing to pay when needed
-
Worry with demand side rationing
Adverse health effects
- Copayments reduce demand living longer with disease,
Equity
- Copayments react stronger to the poorer; restricting healthcare use
RAND experiment
- Really poor react strong to copayments; exempting them from coypayment
- But Little difference in use when a copayment is used
Copayments can lead to
- Less demand
- SID (higher cost for society)
goal of copayments
Use not to much healthcare; Make a decision if its worthwhile to visit
Primary line; be a gatekeeper for use of healthcare
objections of copayments
- only a shift in costs from society to individual
- Assymetric information can lead to health consequences
Limiting entitlement; limiting BBP
Explicit form of rationing
- limiting demand for treatments (others left to private market)
- hard vs soft rationing for escapes
- Through looking at opportunity costs
Demand side rationing mechanisms
- Limiting BBP
- Copayments
health technology demand side
Drive the costs up
- when to include and when to exclude?
- only fund the most cost effective
Funnel (in Dutch: trechter) of Dunning
- Necessity (of insurance and of care)
- Effectiveness
- Cost-effectiveness
- Feasibility
Qaly
1 = good health
0= dead
Derived from the general public
Decision rule CEA
B-C > 0
Vi
valuation of society
delta ct
costs of treatment compared
delta Qi
difference in effects QALY
ICER
Delta ct / delta Qi
goal with CEA in healthcare
Assisting decision maker to maximize health from the given budget
Society costs perspective on CEA
- Direct medical costs
- Direct non medical costs
- Productivity costs
- Benefits or improved well-being
- Indirect costs in gained lifeyears
ICER comparison to value of health society
- ICER< Vi –> cost effective
- ICER > Vi –> not cost effective (to expensive)
Oppertunity costs views
- What we are currently spending on
- Move away from somewhere else (sacrifice outside healthcare)
How opportunity costs included in CEA
alternative should reflect the oppertunity costs
2 ways of CEA!!!!!
- Cost per QALY below treshold or not
- All gained QALYs (2000 patients * 0,6) * total cost per QALY (80.000) = 96 million
96< 160 million vi; 96 health benefits and 160 million of costs!!!!
Losing of QALY calc
- 160 million
- ICER now is 40.000 per QALY
160.000/ 40.000 = 4000 QALY lost
4000 - 1200 (0,6 *2000 patients) = 2800 QALY lost opportunity costs
Alternative of yes or no in appraisal stage
Now we negotiate to bring the price down; and will result in better CEA ratio
some criteria for explicit rationing in BBP
- More health gains per euro; higher priority
- Adjusted for equity considerations
- More health loss if not treated
- More solidarity with more severe ill; higher treshold
Kidney transplants benefits
- Live longer
- QOL improves
- Cheaper than dialysis
- productivity in society possible
Kidney transplants and rationing
- Demand is increased and left untouched
- Supply decreased; natural scarcity
Kidney transplantion live more advantages
More on supply side
- solution for shortage
- recipient in better condition
- shorter waiting time
- longer transplant life expenditure
How to do something about supply of kidneys
- Promote live donation
- Promote exchange programs (cross change)
- break down barriers
- resolve misconceptions
- education professionals and public
Costs of kidney transplants
longterm survival is nog changing so fast as the demand is increasing (renewal)
- anti rejection therapy
- rejections and insecurities
- risk of infection
- Why the rationing of organs is inevitable from an economic perspective
Demand is higher than the supply so people have to rationing;
- Supply is scarce through natural scarcity, have to decide who going to treat and who not
relative scarcity of resources
insufficient goods to satisfy all wants and needs, trade-off is necessary
Natural scarcity of resources;
supply of good is naturally limited
- How organ transplantations can lead to opportunity costs within the healthcare system.
The costs of what you sacrifice to do something; resources such as organs. Bed, time, equipment, physicians, nurses.
They can not be used in other settings to treat patients
Organ transplantation is really expensive (time, , money) could have been spend on other goods in healthcare.
Implicit rationing: assignment
Implicit rationing: society determines the health care budget, but leaves it to physicians to allocate resources t to individual patients (fixed budget; bedside rationing)
Limit the resources; for instance doctors, beds, kidney transplants
o Government sets budget
o Can be differences between hospitals and doctors
Explicit rationing: assignment
society determines the rules that determine under which circumstances patients can claim medical services (flexible budget)
o How to decide on basic benefit package
o Government sets the rules
o Exceed budget that is allowed to some extent
- Explain whether you would describe not prioritizing the 34-yo woman as soft or hard rationing
Soft rationing; Markets for goods/services that are not offered by the public healthcare system are allowed
Hard rationing; Such markets (in this case for organs) are prohibited
There is no market for organs; China there is market for death penalties organ donations, but also a black market network – Organ trade
- Hard rationing in this case
- Explain how different rationing rules at the hospital level can lead to inequalities between patients waiting for a transplant
Implicit rationing; fixed amount or organs to be transplanted and no rules set to distribute these organs
Decisions to transplant individual patients made at hospital level may lead to different assessments and decisions – general rules (e.g., by profession on European level) help to avoid this (explicit rationing)
- Bedside rationing; physician decide at the bedside to who’s the kidney goes
- low ses; not good at articulating wishes and needs
- not good at finding way in the system
- Low SES can not take time and not pay traveling costs
Koopmanschap et al. (2005)
1. Which of the five scenarios do you think is most likely in the case of the 34-yo woman;
- How waiting 2.5 years for a kidney may affect the costs and effects of treatment.
Most likely situation 4 or 5, as they are not compliant with current treatment. Health will deteriorate and be not at the same level before treatment
Additional costs with waiting possibly additional costs associated with more intensive follow-up care
Effects treatments; higher chance of kidney rejection, as the QOL after the transplant may be lower
Belgium healthcare system aspects 5
- Financed through taxes and membership
- NIHDI; distribute money between insurers (differentiated between populations
- fee for service
- no gatekeeping
- open budget financing
- inpatient; reimbursed
- outpatient coverd directly
outpatient care
Medical or support services provided without requiring hospital or facility admission (e.g., doctor visits, therapy, or day treatments).
Inpatient care
Care provided in a facility where individuals stay overnight or longer, including hospitals or residential settings like nursing homes, with ongoing medical or nursing support.
unconvictioned
Cannot charge tarifs above the maximum by the health insitute
oppertunity costs inside and outside
The same resources can produce more health/ wellbeing elsewhere
- Outside healthcare; less educatiom safety, infrastructure
- Inside healthcare; price of health is forgone, more for this means less for others
Supply side belgium
Implicit rationing; closed end budget set
- global budget with partial budgets; overrun adjust fee schedule or increase copayments
- different budgets per region population that is served
Quota
- Numerus fixus
- Quota on hospital and inpatient services
- Quota on hospitals that can provide certain times of care (cancer quality)
cost effectiveness & budget impact analysis
- If we reimburse, what will be the impact on the closed end budget
Closed end budget
Budget is fixed
- hospitals less incentive to growth unless behind of competition
- not more than budget
GP in belgium
Fee for service
- Now incentive for prevention
- Capitation payment
Overrun of closed end budget
Clawback clausule
- Own responsibility of company
- risk own
- there is a maximum you can resitute between projections and actual spending
What are the intended actions with closed end budget for pharmaceutical companies?
- international review about pharma prices each year, not to much is asked
- Incentive correct use of drugs; efficient use of budget
Locoregional networks
Services need to be offered within a hospital network and not in each hospital
- Better quality
- more concentration
- reducing of overprovision
supra regional networks
Only for rare diseases treatment offerd in a supra regional network with the right
- equipment
- investments
Disadvantages of supply side rationing belgium
- Reduced capacity; labour shortages
- Waiting times
- no rationing mechanisms for nurses (personell shortage); higher mortality with few nurses
Demand side rationing Belgium
Copayments; spot price and little copayment per visit
- Paying everything upfront; reimbursement
- Maximum treshold
- differences between SES
Barrier low SES demand side rationing belgium
Low income can ask for a status which they dont have to pay the spot price
- IR; increased reimbursement as solution
IR and problems
Increased reimbursement
- status
- lower copayments
- Third party system GP
Problems; stigma, arbitrary treshold
IR and healthcare spending
Those with the IR status used more healthcare
- System problem
LMIC rationing different why?
- Higher own payments
- Differences in healthcare acces
- Fewer resources
- Weaker institutional frameworks
Which rationing type LMIC
Supply side
- Left demand untouched
- Free care JSY
But
- Waiting lines
- Own payments;
- High opportunity costs; travelling free time
Problems LMIC
- Discrimination of ethnic groups
- Care costs catastrophic to
- Bribes as copayment
- Lot of diseases you can prevent with communication
why bribes as payment
To bridge the gap between
- actual supply
- Needed supply for the equilibrium
OOP signals catastrophic spending
After health shock
- push them beyond the poverty line
Demand side rationing
Filmer et al 2002 Dimensions of when governments should intervene and how
Horizontal axis; high responsiveness to policy
Vertical axis; low degree of distortion of high degree of distortion in consumption of care
High responsiveness to policy and high degree of distortion
- vaccinations
- research
- information provision
low responsiveness to policy and high degree of distortion
- emergency care
- information from noncredible governments
high responsiveness to policy and low degree of distortion
- routine care when percieved risk is low
low responsiveness to policy and low degree of distortion
- routine care when percieved risk is low
distortion LMIC
Market failures
- externalities
- asymmetric information
- uncertainty
Government should intervene
UHC and SDG index
UHC: Ensures everyone gets quality healthcare without financial hardship.
SDGs: Global goals addressing health, poverty, environment, and inequality.
preston curve and difficulties
Correlation between life expectancy and GDP
Why difficult for causality
- Life expectancy driven by infant deaths
- Health institutions quality lower; monitoring
- If you have bad health, lower productivity
Primary care in LMIC
Should be tax funded; tax capacity low
- OOP too high
Gatekeepers
Lancet commission on primary care suggestions in LMIC
- Public resources for financing PHC
- Free PHC via pooled funds
- Equitable resource allocation; needs based per capita allocation
- Blended provider payment (capitation)
Rationing application LMIC for pregnant women in hospitals
Beta * s - C + beh. component
B> C
- in costs included also bribes and traveling costs with makes the cost pretty high
Policy tools to reduce corruption in healthcare
- Punishment
- Fee
- Enough resources and personnel
- Awareness of rights for women
- Culture changes; guideliness
- detection and checks; list experiment; ask 4 and then 5 questions -> difference if paid a bribe
Discrimination in rationing in LMIC
When faced waiting times, Based on:
- taste of provider
- statistical; some people higher chance of getting better
- Class system
- Gender; more productivity
Bribes effect and paradox - Landrian
If they pay they recieved less healthcare checks; where higher eductated
- Initial thoughts; higher educated recieved more care, not the case!
wedges - Dupas
are problems or barriers that cause differences in healthcare utilization
- Economic returns; men more productive, societal norms
- Biased preferences; male health over female health
- Female specific costs; barriers as limited mobility, travel costs
Implications for wedges
- gender targeted policies; Lower costs of mobility for women; gender targeted policies
- societal adressing
- l
Beveridge style
Healthcare provided by the government
- Owns hospitals
- Healthcare providers are employees of government
- Almost free at point of use
UK
Copayments in UK
Out of pocket expenses; free time, travel and parking charges (biggest costs, costs of own time)
Prescription charges
Long term care
Biggest costs in the UK for people
The costs of their own time in seeking and receiving healthcare
Rationing mechanisms used
- Rationing by waiting time (supply side)
- Rationing by science (rationing by demand)
- rationing by location (supply side)
- Rationing by how rich people are (demand side)
Rationing by waiting time UK + disadventage
Fixed budget
- Limit of resources; beds, nurses and physicians
- Demand results in waiting times
- Depends on type of services and time of year
Disadvantage;
- Gatekeeper mechanism ist working, harm yourself health
Shorten waiting time by
- Waiting list targets; with or without penalties
- Offering patients more choice and competition
- Prioritizing waiting lists on medical need
Rationing by location
Look per location at the scares resources
- based on the medical need in a area resources are provided
- in England much greater area; litte copayment, because of larger need
rationing by postcode
Postcode rationing is when access to services, resources, or benefits is determined by where a person lives, based on their postcode (or zip code). often determined by specific policies of local healthcare organizations.
- Difference per city on how you are reffered to do with policies
- Differences per city in population and funding because of taxes for example
Rationing by how rich people are
Scarces resources are distributed to how wealthy people are
- Knowlegde, better navigate in healthcare system
- Private insurance
- Soms forms of care limited public provision
Rationing by science
Allocate resources based on science, effectiveness and cost effectiveness
Need maynard 2013
Need is a health condition for which there is a clinically and cost effective treatment
Absolute QALY shortfall
QALY a person loses due to a disease, compared to what they would have experience with perfect health
- 10 QALY los, shortfall is 10
Proportional QALY shortfall
Percentage of the expected qaly lost relative to a persons total expected QALY without the illness.
- loss in proportion to the life expectancy and health potential
Example: If a person was expected to have 20 QALYs but loses 10 due to an illness, the proportional shortfall is 50%.
Distinction bewteen absolute and proportional QALY shortfall
Absolute QALY Shortfall: Younger people lose more QALYs because they have more potential healthy years left. Older people lose fewer QALYs as they have less time remaining.
Proportional QALY Shortfall: Focuses on the percentage of life quality lost. Conditions often take a smaller proportion of QALYs from older people compared to younger people.
Ensure fair decisions on which to reimburse balancing the impact of conditions across ages
Downsides of waiting time rationing
- delays can lead to worse outcomes
- discriminates agianst individuals that might lose income of taking time off or difficulties making appointments because of inflexibility
- Much out of the pocket costs; free time and parking costs
- Outdated and repeated test; because of the waiting time
rationing by location cons
- Induces inequalities between postcodes, location (postcodes with low literacy are worse off); less resources and no allocation system
- variation in practice; when being corrected for medical need and population in location –> less Resources per location, fixed budgets in public financed system
Rationing by how rich people are cons
Jumping ques because of private insurance (short waiting times)
- Differences in contracts (MSZ)
- separating public and private facilities
- Monitoring of waiting time
Rationing by science cons
- Explicitly denying –> political resistance
- might be effective, but not cost effective
- discrimination because of science most value
Maximizing overall health for population given the scarces recouces
HTA and why rejected
health technology assesment
- mostly cancer drugs
- recommendations
Cons;
- Effectiveness is insufficiënt
- Methodological inconsistencies
ICER; incremental cost per QALY why handy?
- Provides an standard approach for sequence of decisions
- recognizes the budget constraint
- relative transparent in comparison with qualitive effectiveness studies
- recognizes severity and young and old; modifiers
Treshold of QALY should reflect the 3
- oppertunity costs; of the alternative
- WTP for health
- Aspiration about levels to spend healthcare
shortcomings of assumptions on QALY
Assumptions
- Interval scale; all changes worth the same value, different per disease
- constant proportional trade off; the length of an health state does not impact valuation; maybe the case
- The order of health states does not affect the value of a state (maybe the case)
Qalys do not reflect al the societal value gained from the health interventions, spillovers, scientific advances
Methodological variances sometimes, but less than than other methods
QALY pros
- standardized metric for sequence of decisions
- QALY can also be overruled by deliberate decision making processes, just an added value
- other alternatives (added clinical value, DCE) are not standardized for these decisions
Threshold ICER based on!!!!!!!!
- oppertunity costs of services deplaced
- The societal WTP for health gains
- goals about the level of healthcare spending; how much to spend while quality
Most used is the oppertunity approach
other aspects considered in rationing on science
- bridging the gap between therapies
- quality of life improvement
- Absence of other therapeutic options of proven benefit
-Evidence that a sub-group may derive specific or extra benefit
h
arguments against rationing by science
- Accepts higher CEA treshold than for current therapies
- price drugs as manufacturer just below this treshold
- focusing on marginal benefit could divert attention from broader healthcare needs
tools for price negociation
- Price to high reduce price in negociation to be more cost effective
- Risk sharing agreements; not effective manifucturer steps in
Public financed systems
Acces based on
- need and cost effectiveness
Private financed systems
Based on willingness and ability to pay for health
- Inequalities
Adjustment of weight QALY when
- end of life decision
- young or old
- severity
- rare cases
rationing of tax funded healthcare system
Public health act (PGW), Social support act (WMO), Youth act (JW)
Implicit rationing
- Allocation of the fixed budget; a distribution key to determine how much to which municipality (supply side)
- Maximum level of copayment determination (demand side)
Muncipalities responsible for
- ensuring timely care, customized and high quality care
- early signaling of care needs and action
Advantages of a tax based system rationing
- objective distribution key to allocate resources
- councils democratically elected; act on the need of the society
- early signaling mau reduce need of secondline care
- Copayments reduce moral hazard
Cons of a tax based system rationing
- Each municipality own budget, can lead to unequal access, because of different filling of policies
(implicit rationing, postcode rationing, horizontal inequity)
Horizontal inequity
- People with the same need don’t have acces to the same Resources within care
- Copayments are income dependent and may lead to inequalities
- fixed budget may increase waiting times as the market has to deal it on his own
public health act
- Tax funded
Focusses on individual an collective prevention, health promotion and public health treats
JW
Tax funded
Focus on support and care for young people and their families coping with parenting and developmental issues, psychological problems and disorders
WMO
- Tax funded
Focus on providing support to people with (physical or mental) disabilities, increasing people’s self-reliance, ability to live at home, and be productive
insurance based healthcare acts
- WLZ
- ZVW; health insurance act
explicit rationing; strict guidelines and rules how to allocate the resources and what is covered and what not
Long term care act and sort rationing
Focus on most vulnerable groups in society (people with severe physical or intellectual disabilities, long-term psychiatric disorders) who need 24-hour care
Demand side rationing
- access based on need and assessment is provided individually bij CIZ
- income dependent copayment
Zvw and sort rationing
Focus on curative healthcare services and secondary and tertiary prevention
- Copayments; deductible and copayment
- Limiting the BBP
More flexible budget than taxed based system
advantages of insurance based system rationing
- copayments reduce moral hazard
- one budget, equal access
- Income dependent subsidy to reduce inequality
- Government democratically elected and influenced policy
Cons of insurance based system rationing
- Flexible budget, cost containment difficult
- explicit rationing; policies apply for everyone, but may not agree
- trade off between equity and efficiency; distributing fairly and maximize health for society
- many stakeholders with different ideas
Phases of BBP allowance
- Selection
- assessment
- Appraisal
- Policy decision
Fourth stage; policy decision
In line with ZiN advice
- minister of health
-
inpatient pharmaceuticals!
Advanced, specialized medications used in hospitals to treat severe or complex conditions like cancer or ALS.
Outpatient pharmaceuticals!
Medications you can pick up at a pharmacy (with a prescription. They are typically for regular or ongoing care.
Stage 1; Selection
Horizon scan
- Overview of all inpatient and outpatient drugs to come on the market
selection of inpatient and outpatient for assesment
Outpatient pharmaceuticals inclusion
Through closed entry system;
- Medicine reimbursement System (GVS)
- therapeutic value
- Only high risk to have impact on the budget; that have large impact
Take into account annex
- Limited reimbursement for interchangable
- Unique pharmaceuticals full imbursement
- unique and expensive treatment if you meet conditions
closed end entry system
Only specific treatments or drugs that meet strict criteria are allowed into the system.
Open entry system
No strict criteria are required for access or inclusion.
Outpatient full assesment when
- p*q = 1 and 10 million
- 50.000 p p year
Inpatient entry
Via an open entry system
- Established medicial science and medical practical science (Evidence based)
- belonging to the area of medical specialists
2023; more closed system and more assesment criteria higher; assesment more likely and placed in the sluis
- treatment is more than 50.000 a year and p*Q is more than 20 million
Stage 2; assesment stage
Funnel of Dunning
- Necessity
- Effectiveness
- Cost effectiveness
- Feasibility
Necessity of reimbursement- questions
Can you it out of the pocket?
- vit D
Depends on the severity disease; cancer patients weight higher than a cold;
- proportional; more interesting for CEA
- Absolute
Why proportional shortfall more interesting for CEA
Proportional shortfall is relevant for cost-effectiveness because it shows the health gained relative to the health lost, making it easier to prioritize treatments fairly and efficiently.
Effectiveness - questions
Being evidence based
- Medical practice
- Medical evidence
- Belonging to the expertise of medical specialists
QALY shortfall proportional
Disease - related QALY loss (without treatment)/ remaining QALY expectation of the disease
- starting point begin of disease
- QALY of 1 for the loss in the down
- QALY los gaat om verlies let op
- Teken uit
Absolute shortfall
is equal to the disease related quality loss
- Bovenste deel breuk
If QALY shortfall proportional is close to 1
Higher deterioration of quality of life
Cost effectiveness- questions
ICER ratio? delta ct/ delta Qi
- ICER must be below the Vi (societal valuation)
Decision rule: Δct / ΔQi < v
- usage of proportional qaly shortfall
Tresholds QALY shortfall
0- 0,10; 0
0,11- 0,40 - 20.000
0,41- 0,70 - 50.000
0,71 - 1 - 80.000
Feasability - Questions
Is it possible and sustainable to include a pharmaceutical in the BBP? What is the impact on the:
- Healthcare workforce
- Climate and environment
- Organisation of healthcare
- Budget (e.g., in relation to saving- or substitution effects, market share)
Possible reasons for including a cost-ineffective pharmaceutical:
- it is used to treat children
- It is used to treat patients with a rare disease (e.g., Zolgensma)
- There is an unmet need/no alternative available
- it is an important innovation.
WAR
Wetenschappelijke advies raad; explains the outcome of the assesment to reimburse or not
Possible reasons for exclusion of a cost-effective pharmaceutical:
- It is used for cosmetic improvements (e.g., Botox)
- It is used for lifestyle improvements (e.g., Viagra)
- it can be paid out-of-pocket (e.g., vitamin D)
Normative theories about equity considering the disease severity
- Absolute shortfall
- Proportional shortfall
Vi consists of
W* V
-w = weight of equity (higher; is for treating patients with a higher proportional shortfall)
- Weight high Vi higher treshold
- V social valuation
ACP and perception
Advisory committee of insurance package
- patients who are eligible for reimbursement
- Who pays premium
- patients with other conditions (oppertunity costs)
When drug discussed in appraisal stage
- Uncertainty about long term effectiveness
- High price
- really innovative
- Additional evidence needed?
When to reimburse with ACP considerations and argumentes
- Invest in advance or wait for competition to do its work
- What is already on the market
Two CEA perspectives
-Healthcare perspective; maximize health under budget constraint - Claxton
- Welfare economics; societal perspective, also look at work and labour; Werner Brouwer
Assumptions of CEA
- Threshold reflect the oppertunity costs; no better alternatives
- Costs are exogenous; ICER reflexts costs and burden for society not the price
But prices are the biggest factor
What is the CAP paying for
Value
- Innovation not mean large QALY gains
Effort
- Poor evidence paying more; has to do with sick patietns
Studies poor
Hope
- Extrapolation of effects
Brinkhuis et al. 2024
- Faster you say oke to a new drug, the less you get in return on the long run
Serra burriel et al 2023
Paying more for cancer drugs because of severity; even when there is poor evidence
Strategy for new inpatient drugs
Demand effort
- Good evidence
Reward value
- new guideliness not more comparison to InCEA
- QALY standard
Temporary character of thresholds
Threshold of CEA is maximum and temporary, because of the ongoing competition after a while
- Threshold goes down
- Patents –> competition
Against intellectual monopoly
Competition triggers innovation?
Are patents good
why the right to control an idea or creation
Intellectual property
Only an abstract idea has no value
- Only when implementing it
- Implementations are property
Right to control an idea and use of the idea
- intellectual property = intellectual monopoly
arguments for monopoly with patents
- high fixed costs
- being a follower better than leader (low risk and no R&D)
- no innovation otherwise
Arguments against monopoly with patents
- Is imitation easy?
- are monopolies temporary; long time no entery
- what are the reasons for high costs
- public investments in research?!!!!
Idea to counter the high fixed costs of patents
Public finance R&D
rent seeking
increase share of existing whealth without creating new wealth; influence legislation to protect market position
- Strong protection
Evergreening
Pat enting modifications on a existing drug
Make doctors prescribe the medical and then make an adjustment which everyone needs to use that is also pattented
- Circle
things a manufacturer can do to have market share
- Evergreening
- Pay competitors to not innovate
equity with patents
Higher price due to monopoly position
- Higher payments or even copayments
Consequences of monopolies
- Barriers to entry; more than accounting profit
- Profits have no incentive for extra supply, because there are no extra sellers
- Long term profits only distribute wealth among workers, managers and investors
Consequences of patent system
- Increases costs of innovation because of barriers to entry
- rent seeking; legal protection to protect market position
Favour competition because of
- Drives down prices through competition, increases trade and welfare (otherwise less welfare)
- Long run because so many manifacturers that price is MC
current system innovations in drugs
- lot of innovation in me-too drugs; (1innovation lot of products)
- Rare diseases
CEA and patents
Without competition only mechanism to drive down prices
- Value based pricing
Low threshold; no innovation
high threshold; innovation
Alternative ways to induce innovation Boldrin and Levin
- Pay for ideas and not for patents
- Public finance RCTS to test; no fixed costs
- Fundamental research leave it to market
Perspectives in rationing supply side
- societal perspective; lowest price for equity
- producer perspective; profit seeking
- big pharma perspective (buy of ideas; wait for demand)
fiscal sustainability
Ability of government to manage resources efficiently without harming future generations
intergenerational redistribution
Move resources such as premiums and taxes from young to old generations to finance healthcare
fiscal mechanisms for financing
- social insurance; percentage of income
- Healthcare insurance; Household care
- social care; subscription
why public financing of LTHC
- Independent probabilities (not the same probabilities of getting older)
- Probability (At lower ages yes, at higher ages no (chronic diseases)
- Probability is estimable
- Asymmetric information
* Moral hazard; more than normal healthcare (can provide housekeeping yourself, but is paid for you)
- Scope for moral hazard in long term can be very high
why moral hazard in LTC scope high
Using thing that are unnecessary; because of income for example
tail risk
you are one of the 5% that stays very long in nursing home which costs lots of money
insurance choice
- tend to underinsure
- complex products; what you need on your current status
- uncertainty about need
- uncertainty about coverage; prices rise
- People dont think about old age
why LTC different from curative care
- Product is different; not curing but meaningfull life (no clear outcomes, but little proces indicators CEA difficult)
- Partly subsituted by informal care and private acces
optimally provide LTC
- Some have financial and informal care network that can provide LTC
- Some groups not a strong network and no financial leverage
Poorer react stronger and more benefits
- Some have financial and informal care network that can provide LTC
- Some groups not a strong network and no financial leverage
If you do this what are the risks
- Moral hazard; poor use formal care while because you have acces to informal care would also do
- Deadweight loss; Public funds are spent on providing services who could have afforded them independently, leading to inefficiency.
Example: Subsidizing LTC for wealthy individuals who would have paid for it privately.
three broader rationing mechanisms
- Eligibilty; criteria for suitable long term care
- Copayments
- Waiting lists for the provision of long term care
Eligiblity
assesment of CIZ for getting acces to LTC
- medical need (limitations)
- preferences
Assessors discretionary power of exogenous variation (Depends on their subjection)
endogenous should be based on case mix
lenient
likelihood to assign nursing home care
eligibility pros
- Decrease in probability of a hospital admission
- standardized process; guidelines but few differentiation possible
- can enable aging in place
eligibility cons
- variation in acces caused by discretionary power of assessor
- elgible doenst save medical care spending and mortality
waiting lists LTC
For the provision of healthcare
- triage based medical need
- Can be way to allocate resources in an equitable manner (who needs it most)
waiting lists LTC cons
- Spillover effects
- Based on medical need but under reporting
- Delay
- worsen health state
Causes of variation in delay
Urgency and observed health
- demand; no information of health
- supply; triage
hospitalization
waiting lists LTC pros
- more equitable; based on need
- resource management; buffers variability in demand
Copayments as broader mechanism cons
- Not income dependent can lead to moral hazard
- Little prevention
- equity principle
Copayments as broader mechanism pros
- Income depedent reduce demand
- more prevention or informal care
Implicit rationing
Actors within the system decide on allocation of resources
Explicit rationing
Specific criteria for services to be claimed
Germany healthcare system
No systematic healthcare system rationing
- PHI and SHI (stationary)
- PHI voluntary but salary threshold or self-employed
- DJC decides on package
FJC
German authority to decide on; access, benefits and quality
- decisions on evidence
- What is covered on SHI
IQWIG; evidence and efficiency healthcare
IQTIG; quality perspective
Demand side rationing; inclusion in BBP Germany
Inpatient drugs; almost every drug included
- Principle; effective services must be covered
- Quick access to the market for patients
- Disproportionate outcomes
two hurdles in Germany
Inclusion based on additional clinical benefit
- No explicit considerations of costs
- No Qalys
No considerations on cost-efficiency
What is used in germany to access inpatient drugs?
- Quality
- Safety
- Efficacy + tolerability
Benefits german system
- Quick access for patients
- Less equity considerations
- Comprehensive BBP
Cons of german system
- Costs rise hard
- Drugs price high as there is no threshold on CEA; price paid for access is high
- disproportionate outcomes
Price of drugs in Germany
Supply side rationing Germany
- No gatekeeping
- Underprovision of GP; due to hard criteria
- Equity concerns on low SES and low GPS
- To much excessive capacity
PHI germany equity
Incentive to ask for higher fees
- More wealthier
- can discriminate on pre-existing health
PHI and SHI impact on rationing
PHI
- Useless care because they are healthier (no rationing)
- Useless care because it costs them more initially (rationing)
- Use more care because they are preferentially treated (rationing)
SHI
- Use more care because they are less healthy (no rationing)
- Use less care because of low access to it (rationing)
