What if: The price of new provider fees were coordinated across Canada, supported by existing HTA capacity and networks? D...
Context <ul><li>Increasing expenditure on providers (CIHI, 2010) </li></ul><ul><li>Opportunities for gains in efficiency (...
Context <ul><li>Fees are cost-based - little incentive for choosing high- versus low-value service </li></ul><ul><li>Uncer...
“ Whipsawing” 18/07/11 “ Cars” pajamas
Current use of HTA in adopting new provider fees 18/07/11
Proposed Option: HTA-based Pricing Provider Services  <ul><li>A pan-Canadian approach, informed by HTA  </li></ul><ul><ul>...
Proposed Option: HTA-based Pricing Provider Services  18/07/11
Example using Value-Based Provider Fee Modifiers  18/07/11 Year Technology A (Cost = $200 per year) Technology B (Cost = $...
Proposed Option: Optional Functions <ul><ul><li>Develop  a standard approach to assessing the value of new fees, which cou...
Benefits <ul><li>Reduce inequity in fees for services across country </li></ul><ul><li>Reduce unnecessary political pressu...
Challenges <ul><li>Whose value? – QALYs may be insufficient - will require explicit, agreed-upon recognition of value </li...
Implications for Canada <ul><li>Recommendation: </li></ul><ul><li>New coordinating body required that must be governed pro...
Don Husereau [email_address] 18/07/11
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WHAT IF: The price of new provider fees were coordinated across Canada, supported by existing HTA capacity and networks?

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Don Husereau, University of Ottawa

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WHAT IF: The price of new provider fees were coordinated across Canada, supported by existing HTA capacity and networks?

  1. 1. What if: The price of new provider fees were coordinated across Canada, supported by existing HTA capacity and networks? Don Husereau, University of Ottawa [email_address] 18/07/11
  2. 2. Context <ul><li>Increasing expenditure on providers (CIHI, 2010) </li></ul><ul><li>Opportunities for gains in efficiency (WHO, 2010; OECD, 2011) </li></ul><ul><li>Provider choices (medical technology) source of expenditure growth (Newhouse, 1992; Cutler and McClellan 2001) </li></ul>18/07/11
  3. 3. Context <ul><li>Fees are cost-based - little incentive for choosing high- versus low-value service </li></ul><ul><li>Uncertainty of cost-effectiveness leads to “experimental“ or uninsured status </li></ul><ul><li>Lack of standardization for fee code development – opportunities for “whipsawing” </li></ul>18/07/11
  4. 4. “ Whipsawing” 18/07/11 “ Cars” pajamas
  5. 5. Current use of HTA in adopting new provider fees 18/07/11
  6. 6. Proposed Option: HTA-based Pricing Provider Services <ul><li>A pan-Canadian approach, informed by HTA </li></ul><ul><ul><li>Develop standard method for translating HTA information into value-based fee price modifiers, and create value-based modifiers for future provider services. [Mandatory] </li></ul></ul>18/07/11
  7. 7. Proposed Option: HTA-based Pricing Provider Services 18/07/11
  8. 8. Example using Value-Based Provider Fee Modifiers 18/07/11 Year Technology A (Cost = $200 per year) Technology B (Cost = $2,100 per year) Total healthcare cost Units Fee Costs Tech A Cost Total Cost Units Fee Cost Tech B cost Total Cost Pre- modifiers ($30 fee for both) 1,000 $30,000 $200,000 $230,000 1,000 $30,000 $2,100,000 $2,130,000 $2,360,000 Post- modifiers ($45 for A; $15 for B) 1,400 $63,000 $280,000 $343,000 600 $9,000 $1,260,000 $1,269,000 $1,612,000 Difference 400 $33,000 $80,000 $113,000 -400 -21,000 -840,000 -861,000 -748,000
  9. 9. Proposed Option: Optional Functions <ul><ul><li>Develop a standard approach to assessing the value of new fees, which could be adopted by individual provinces. [Optional] </li></ul></ul><ul><ul><li>Develop a resource-based relative-value schedule of all or some (those most often used) fee codes across provinces. [Optional] </li></ul></ul><ul><ul><li>Review new fee codes and create suggested provider fees for adoption across jurisdictions. [Optional] </li></ul></ul>18/07/11
  10. 10. Benefits <ul><li>Reduce inequity in fees for services across country </li></ul><ul><li>Reduce unnecessary political pressure </li></ul><ul><li>Influence providers’ behavior toward best practices in use of health technologies and avoid unnecessary health expenditures </li></ul><ul><li>Works with supplier-induced demand (Evans, 1974; McGuire and Pauly 1991) and fee-based utilization </li></ul><ul><li>Provide a platform for further health system efficiency through </li></ul><ul><ul><li>Coordinated technology management </li></ul></ul><ul><ul><li>Coordinated health and human resource needs </li></ul></ul>18/07/11
  11. 11. Challenges <ul><li>Whose value? – QALYs may be insufficient - will require explicit, agreed-upon recognition of value </li></ul><ul><li>Costly - requires priority setting </li></ul><ul><li>Variation in current fee schedules – requires communication and priority setting </li></ul><ul><li>What is high-value? – requires threshold or other measure of opportunity cost </li></ul>18/07/11
  12. 12. Implications for Canada <ul><li>Recommendation: </li></ul><ul><li>New coordinating body required that must be governed provincially. </li></ul>18/07/11
  13. 13. Don Husereau [email_address] 18/07/11

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