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Health Insurance Law

EMBA June 9, 2012. Health Insurance Law. Approach. A focus on Switzerland The overview of the present system A few choice of topics to study in depth (choice by students) Class discussion about future rationing of health care & ethical issues. Plan of the class. Some numbers to discuss

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Health Insurance Law

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  1. EMBA June 9, 2012 Health Insurance Law

  2. Approach • A focus on Switzerland • The overview of the present system • A few choice of topics to study in depth (choice by students) • Class discussion about future rationing of health care & ethical issues Prof. Junod – EMBA - HealthInsurance Law

  3. Plan of the class • Some numbers to discuss • The Swiss insurances • Health insurance: for patients & for professionals • The future: should costs be contained? How? What ethical safeguards? Prof. Junod – EMBA - HealthInsurance Law

  4. Health insurance concerns encountered? • Should I get insurance? • Complementary insurance? • Why is so expensive? • Will I be reimbursed? • Can I choose my health care providers? • Who will pay me if I am sick? • How do I get my product reimbursed? • Do I need an authorization? Prof. Junod – EMBA - HealthInsurance Law

  5. Part 1: Somenumbers Prof. Junod – EMBA - HealthInsurance Law

  6. What do they mean? What are the implications? • For governments • federal and cantonal • For taxpayers • For patients • For doctors • For companies Prof. Junod – EMBA - HealthInsurance Law

  7. Part 2: The Swissinsurances Prof. Junod – EMBA - HealthInsurance Law

  8. A variety of insurances Public insurances: • Old age + survivors • Invalidity / disability • Health care • Accident (work & non-work) • Maternity • Military • Unemployment • Old age (professional) (occupational benefit plan) (LPP)* Private insurances Prof. Junod – EMBA - HealthInsurance Law

  9. Three pillars system for old age benefits Prof. Junod – EMBA - HealthInsurance Law

  10. Some definitions • Illness « any impairment to the physical, mental or psychological health that is not the consequence of an accident and which requires a medical examination or treatment or results in incapacity for work » • The Champix case. • Accident « the sudden, unintentional, harmful influence of an exceptional external force on the human body, resulting in the impairment of physical, mental or psychological health or death. » • Important implications whether accident or illness. Prof. Junod – EMBA - HealthInsurance Law

  11. Part 3: Healthinsurance Prof. Junod – EMBA - HealthInsurance Law

  12. The basics of the system (I) • Since 1996 • Several revisions • Mandatory • For whom? Exceptions? • Basic + supplementary private insurance • Paid by • Premiums + State assistance + State direct payments • What kind of premiums? • Approved by State (minimal oversight) • By 3 age groups • By canton • By insurance fund Prof. Junod – EMBA - HealthInsurance Law

  13. The basics of the system (II) • Choices left to the patient • Insurance fund (80-90) • can be changed every year, sometimes twice a year • Deductible per year • 300 (500) – 2’500 for adults; 0 (100) to 600 for children • Healthcare network with primary care physician as point of care Prof. Junod – EMBA - HealthInsurance Law

  14. The basics of the system (III) • Choices left to the insurance fund • Setting premiums • Very little: cannot refuse anyone for basic insurance • Health questionnaire prohibited for basic insurance • What about risk selection? • Risk compensation: yes, but to be improved • But « tiers payant » vs « tiers garant » for drugs • The case of Assura…? Prof. Junod – EMBA - HealthInsurance Law

  15. What is covered? • Fixed set – identical for all • Mandatory for insurance funds • Territorial principle • What about treatment abroad? • Outside the canton? EU? Outside EU? • What if less expensive? • No « Cassis de Dijon » • System of open or closed list • Open: health care services • Exceptions OPAS: annexe 1 • List of specialties (drugs) • List of devices (semi-closed) Prof. Junod – EMBA - HealthInsurance Law

  16. Tarmed and Swiss DRG • For ambulatory care • TARMED • The difficulties • Insurance funds’s control over doctors’ diagnostic • For hospital care • Swiss DRG • The fears: • Will patients be kicked out of the hospital too soon? • Will private clinics be unfairly advantaged? Prof. Junod – EMBA - HealthInsurance Law

  17. Maternity • All « normal » maternity care • e.g., 2 ultrasounds scans; antenatal checkups; antenal class for CHF 100; amniocentesis if over 35 years or risk factor over 1:380; 3 breastfeeding consultations. • Without any copay ! • Covers the first 3 months of the baby for « normal » care. • Loss of wages covered by separate insurance Prof. Junod – EMBA - HealthInsurance Law

  18. What is typically not covered? • Loss of wages (in practice not by health care insurance) • Dental care • Most medically assisted reproduction services • Private care in hospitals • Experimental treatment + clinical trials • Off-label drug use (with exceptions) • What is covered by another insurance • health care insurance plays residual role • + statute of limitations: 5 years. Prof. Junod – EMBA - HealthInsurance Law

  19. What costs do patients bear? • Premiums • Minus government subsidy for about 30% population • Deductible • Max. to be chose: CHF 2’500 • Copay (retention fees) • 10% - sometimes 20% for certain drugs • Max. CHF 700 a year for adults / 300 for children • Hospital copay • Up to CHF 15.- a day. Prof. Junod – EMBA - HealthInsurance Law

  20. Private insurance • Left to the discretion of the patients • Significant part of the population has at least 1 • Insurance funds free to propose or not and what to propose • Only way to make money for insurance company • Much less regulated: federal law on private insurance contracts. • A great variety of policies proposed • Typical: Private or semi-private care in hospitals • Also: alternative medicine. • Also: approved drugs but not on LS Prof. Junod – EMBA - HealthInsurance Law

  21. Control over excessive care By regulatory means: By judicial means: • Obligation to reimburse for patients • Rare. • If « not effective, expedient or economical » • Obligation to reimburse for health care providers • Legal basis: article 56 • Common • Very controversial • Complex • Has changed recently for drugs Prof. Junod – EMBA - HealthInsurance Law

  22. How do drugs become reimbursed? • Detailed submission to FOPH • Administrative decision. Appeal possible only by manufacturer • How is the factory price set? • 2 comparisons: • Foreign price • Reference product • How is the final price set? • Add margins and VAT • What further conditions to reimbursement? • No more marketing/publicity Prof. Junod – EMBA - HealthInsurance Law

  23. What if a generic drug? • Mandatory discounts based on market’s size. • min. 10% difference if below CHF 4 million a year (over the 4 years preceding patent expiry) • min. 20 % if between 5 and 8 millions • Min. 50% if between 8 and 16 millions • Min. 50% if between 16 and 25 millions • Min. 60% if above 25 millions. • Different copays depending on the price difference • 10% in normal cases • 20% if important price differences between drugs with same active substance • Possible substitution by the pharmacist • Paid by the insurance fund Prof. Junod – EMBA - HealthInsurance Law

  24. What if a drug is not reimbursed? • Free pricing • Antitrust law • Price supervisor • Parallel imports Prof. Junod – EMBA - HealthInsurance Law

  25. Part 4: Costcontainment Prof. Junod – EMBA - HealthInsurance Law

  26. The Myozyme decision of the Supreme Court • Drug outside the LS • Drug for rare disease • Price: half a million a year • Two efficacy requirements • One economicity requirement • The conclusion • The debate – the implications • The ordinance was then changed, confirming the judgment. Prof. Junod – EMBA - HealthInsurance Law

  27. The QALY tool • Cost per quality-adjusted life year • Takes into account both survival benefits and quality of life • Standardized for all kinds of treatments • Thresholds • Around CHF 100’000 in Switzerland • Below £ 30’000 in the UK • More if end-of-life? • Advantages of the QALY system • Drawbacks of the system Prof. Junod – EMBA - HealthInsurance Law

  28. Cost containment in the pharma sector • Negotiations with industry • Retrospective controls over previously accepted drugs • Extending reference pricing: more countries • More frequent price comparisons: every 3 years • Reimbursement of revenues if first price is excessive • Increased discounts for generics • Reduced distribution margins • More FOPH limitatio Prof. Junod – EMBA - HealthInsurance Law

  29. What more could be done? • How to bring patients and providers to be more cost-sensitive without discouraging needed care? • Popular vote of June 17: is it a good solution? • Unique healthcare fund? Is it a good idea? • Setting premiums on the basis of revenues + fortune? • Your ideas? Prof. Junod – EMBA - HealthInsurance Law

  30. Ethical principes • How to implement fairness and equality? • Should ressources be increased? Shared differently? • Should care be rationed? • Who should make the sacrifice? Prof. Junod – EMBA - HealthInsurance Law

  31. Part 5: CONCLUSION Prof. Junod – EMBA - HealthInsurance Law

  32. Thank you ! Questions ? Prof. Junod – EMBA - HealthInsurance Law

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