Regulating and financing health technologies: a comparison between Italy and Spain

2008 Ehma Annual Conference ATHENS, June 2008 Regulating and financing health technologies: a comparison between Italy and Spain Elio Borgonovi Giulia Cappellaro Giovanni Fattore Aleksandra Torbica CeRGAS – Università L.Bocconi European Health Technology Institute for Socio-Economic Research

Regulating and financing health technologies: a comparison between Italy and Spain- Summary - Background and rationale of the research Research objective and design Results Discussion Conclusion and directions for future research

Technological innovation is conceived as one of the major reasons for the growth of health care costs The trend is likely to increase in the future due to supply and demand factors In order to counterbalance the trade off between universal access and cost containment needs, European countries are adopting different policies to regulate the access and the financing of medical technologies. Scholars often underline the influence of financing mechanisms on the diffusion of medical technologies. Few studies are nevertheless based on empirical analysis. Background and rationale of the research

The research investigates the current financing arrangements for selected medical devices in different European countries on the basis of pre-defined dimensions. The study is part of a research program carried out by the new European Health Technology Institute for Socio-Economic Research (EHTI), whose partners are Bocconi University, TU Berlin and London School of Economics. Research objective and design 1 out of 2

Artificial body part Coronary Stent Implantable Cardioverter Defibrillator Coverage Knee endoprosthesis Procurement Medical Aids ITALY Urinary Incontinence Pads Reimbursement ? SPAIN Negative Pressure Therapy Assistance for professionals Utilization Laparoscopic Colorectal Surgery Research objective and design 2 out of 2 COUNTRY MD ANALYSED DIMENSIONS OF ANALYSIS

Published and grey literature review on both national health basket and the selected medical devices; Institutional sources analysis: Official national and regional legislative and normative documents; National and regional web sources; Other professional and specialised sources. Semi-structured interviews: Carried out to a select expert panel of market operators in both Italy and Spain; More than 18 interviews were performed during the period September 2007 -April 2008 to both health professionals and industry representatives; Interviews were performed on the basis of a predefined protocol. Research methods

ITALY SPAIN Assistance for professionals Laparoscopic Colorectal Surgery Results : Artificial Body Parts (I) COUNTRY MD ANALYSED DIMENSIONS OF ANALYSIS Artificial body part Coronary Stent Coverage Implantable Cardioverter Defibrillator Knee endoprosthesis Procurement Medical Aids Reimbursement Urinary Incontinence Pads Negative Pressure Therapy

ITALY Implantable devices are not explicitly mentioned in the national benefit basket (LEA) among the list of services available under public coverage Implicit recognition that all services deemed to be appropriately delivered at hospital level must be available to citizens The grade of explicitness with which inpatient devices have been recognized in the Italian NHS has evolved concurrently with the evolution of DRG classification systems adopted in the country SPAIN System in transition: redefinition and systematization of the health benefit package with the Real Decreto 1030/2006 All the three medical devices are explicitly included in the benefit catalogue, with the indication of the list of model Results: Artificial Body Parts 1 out of 4 - Coverage -

Results: Artificial Body Parts 2 out of 4- Financing aspects concerning procurement - • In both countries artificial body parts implanted on a public hospital basis: • Are purchased through open public tender procedures; • Negotiations take place at local level with single service providers defining volumes and unit prices with manufacturers; Differences appear in regards to : • Regulation of prices at national level: In Italy reference prices have been recently set by the Government in accordance with the Medical Devices Committee (CUD) for a selected list of medical devices • Trends regarding the institutional framework for the purchasing process : In Italy establishment of Regional agencies in charge of centralised procurement mechanisms .

CND CODE DESCRIPTION TECHNICAL SPECIFICATION UNIT OF MEASURE REFERENCE PRICE (euro) P0704020101 BMS Stainless steel Piece 505 P0704020101 BMS Chrome or cobalt-chrome Piece 572 P0704020102 Covered Coronary stents Carbon Piece 557 P0704020103 Drug eluting coronary stents ----- Piece 1486 Results: Artificial Body Parts 3 out of 4- Financing aspects concerning procurement - In Italy FL 2007 introduced reference prices as maximum price ceilings for future tenders.  Possible scenarios: Reference Prices for coronary stents (MD 11/10/07)

ITALY Devices are prospectively reimbursed through DRG tariffs The level of reimbursement is affected by: Inter and intra regional variability in the regional fee schedules; Introduction of different weights for different types of device; Introduction of add on payments for the reimbursement of the specific device. SPAIN Hospital provider and regional authorities negotiate the program contract on an annual basis; Program contract contains the catalogue of services to be supplied and volume of activity agreed; Existence of differences at AC Level (i.e. Andalucia) Devices implanted on an impatient basis are reimbursed through global budget DRG not specifically used for reimbursement Results: Artificial Body Parts 4 out of 4 - Financing aspects concerning reimbursement -

ITALY SPAIN Results: Medical Aids (II) COUNTRY MD ANALYSED DIMENSIONS OF ANALYSIS Artificial body part Coronary Stent Coverage Implantable Cardioverter Defibrillator Knee endoprosthesis Procurement Medical Aids Urinary Incontinence Pads Reimbursement Negative Pressure Therapy Assistance for professionals Laparoscopic Colorectal Surgery

ITALY Most medical aids (ie urinary incontinence pads ) are included in the list of benefits regarding prosthetic assistance (Ministerial Decree 332/99), last update in 2001. Currently under revision: introduction of new Official List foreseen (FL 2008 ) Procurement for both outpatient and inpatient patient with public tender procedures (limited exception for pharmacies) SPAIN Medical Aids are covered by the Social Security and NHS system (Real Decreto 9/1996) Classification (types and features of the ) dates back to late ’80s and since then no relevant updates have been made. For devices sold in outpatient settings prices are set at national level, even though regional agreements are on force. Devices in inpatient settings are subject to public tender procedures Results: Medical Aids 1 out of 2- Coverage – - Financing aspects concerning procurement -

ITALY Prescription required to be eligible for reimbursement Reimbursement ceilings based on quantities No copayment required to patients.. ..Modification foreseen? SPAIN Prescription required to be eligible for reimbursement Reimbursement ceilings based on prices set for pre defined categories of products Co-payment system for pads sold in out patient settings: 40% for non retired people and MUFACE insurers; free of charge for retired people. Results: Medical Aids 2 out of 2- Financing aspects concerning reimbursement -

The two healthcare systems appear similar as they are based upon a National Health Service undergoing a profound decentralization process. In theory, in both countries the Health Basket is conceived as a tool to clarify national health rights and to keep regions accountable In practice, however, the implementation of the system experienced two main obstacles: a) The difficulties to operationally define the benefit package; b) The introduction of a system to make regions/ACs accountable. Discussion 1 out of 2

Relevant differences emerge between the two countries when specific technologies are investigated: Coverage: different degree of explicitness But, what implications? Differences should be analysed together with other dimensions of financing; Reimbursement mechanisms: DRG reimbursement schemes vs. global budget for hospital based technologies (different incentive schemes in place?): global budget appears to be more “flexible” for diffusion of innovation (distribution across different areas of care); DRG tariffs need regular update to allow for introduction of innovative devices (difficult to implement in practice). Co-payment mechanisms for outpatient aids different patient access (between and within country) to innovative products Procurement: Increased role of regional/national governments in regulating the markets: databases /registries of medical devices introduction of reference prices in Italy (too early to estimate the impact) tendency for central (regional) procurement but with difficulties Discussion 2 out of 2

Contribution and directions fur further research • The research is a first attempt to compare the regulation and financing arrangements of specific medical devices in two decentralised systems The next phase: • to investigate the impact of financing of medical devices on their uptake (diffusion, utilization) Important issues to be considered in further research: • Appropriateness in use of medical devices • Equity (geographical and generational) • Cost effectiveness of medical devices

Thank you for the attention! Contacts: Giulia Cappellaro, CERGAS Bocconi – Milano (I) giulia.cappellaro@unibocconi.it

Annex 1: Research Protocol Actual coverage status of selected technologies -Is the technology covered in the national benefit basket (if existing), regional benefit baskets, benefit baskets of statutory insurance schemes ? -In which benefit catalogue(s) is the technology listed or included? -Has there been an assessment and formal decision? If yes, by whom, based on which criteria and evidence …? -Are all variations of the technology analysed included in the benefit catalogue or are some variations excluded? Which ones? Financing aspects concerning procurement -What are the main characteristics of price regulation/setting/negotiations? -At which level are prices set, regulated or negotiated? Are there fixed update appointments? Is actual cost information available/ taken into account for price setting? -Is it possible for a manufacturer to get different prices/payments from different service providers and/or goods distributors? -Which actors are involved in the establishment of prices? Is there central procurement? Financing aspects concerning reimbursement -What are the main characteristics of reimbursement regulation structured for the selected technology ? -What is the unit for payment ? -At which level are reimbursement rates set or negotiated? Which actors are involved in the establishment of reimbursement rates? Are there fixed update appointments (how often)? Which cost information is available/ taken into account? -Is it possible for a manufacturer to get different payments from different service providers and/or goods distributors or do all pay the same price? -Is it possible for a purchaser to pay different rates to different providers? -What does the reimbursement rate include? -What does the Third-party payer pay? -Is there a reference “price “(reimbursement rate); are innovations captured by the reference “prices”? If so “how”?

Surgical implants External Prosthesis Wheel chairs Special Prosthesis Orthoprosthetic services Therapeutic surgical implants Diagnostic surgical implants Cemented Ostearticular Unicompartimental Hip prosthesis Cementless Ortesis Knee prosthesis Primary Cemented Ankle prosthesis Cementless Total Feet prosthesis Hybrid Elbow prosthesis Shoulder prosthesis Cemented Revision Total Wrist prosthesis Cementless Hand prosthesis Hybrid Ligament and tendon Annex 2: Taxonomy of Knee Prostheses (RD 1030/06)

Regulating and financing health technologies: a comparison between Italy and Spain