Curative therapies and other medicines considered "game-changing" in terms of health gain can be accompanied by high demand and high list prices that pose budget challenges to public and private payers and health systems-the so-called affordability issue. These challenges are exacerbated when longer term effectiveness, and thus value for money, is uncertain, but they can arise even when treatments are proven to be highly cost-effective at the time of launch. This commentary reviews innovative payment solutions proposed in the literature to address the affordability issue, including the use of credit markets and of staged payments linked to patient outcomes, and draws on discussions with payers in the United States and Europe on the feasibility or desirability of operationalizing any of the alternative financing and payment strategies that appear in the literature. This included a small number of semistructured interviews. We conclude that there is a mismatch between the enthusiasm in the academic literature for developing new approaches and the scepticism of payers that they can work or are necessary. For the foreseeable future, affordability pressures will continue to be handled by aggressive price bargaining, high co-pays (in systems in which this is possible), and restricting access to subgroups of patients. Of the mechanisms we explored, outcomes-based payments were of most interest to payers, but the costs associated with operating such schemes, together with implementation challenges, did not make them an attractive option for managing affordability.
BackgroundAll health care systems face the need to find the resources to meet new demands such as a new, cost-increasing health technology. In England and Wales, when a health technology is recommended by the National Institute for Health and Care Excellence (NICE), the National Health Service (NHS) is mandated to provide the funding to accommodate it within three months of publication of the recommendation. Identifying what, in practice, is foregone when new cost-increasing technologies are introduced is important for understanding the effects of health technology assessment (HTA) decisions on the NHS or any other health care system. Our objective was to investigate how in practice local NHS commissioners in Wales accommodated financial “shocks” arising from technology appraisals (TAs) issued by NICE and from other cost pressures.MethodsSemi-structured interviews were conducted with Finance Directors and Medical Directors from all seven Local Health Boards (LHBs) in NHS Wales. These interviews covered prioritisation processes, as well as methods of financing NICE TAs and other financial shocks at each LHB. We then undertook a systematic identification of themes and topics from the information recorded. The study relates to the period October 2010 to March 2013.ResultsThe financial impact of NICE TAs is generally anticipated and planned for in advance and the majority of LHBs have contingency funds available to cope with these and other financial shocks within-period. Efficiency savings (defined as reductions in costs with no assumed reductions in quality) were a source of funds for cost pressures of all kinds. Service displacements were not linkable to particular NICE TAs and there appears to be a general lack of explicit prioritisation activities. The Welsh Government has, on occasion, explicitly or implicitly acted as the funder of last resort.ConclusionsServices may be displaced as part of a response to the cumulative impact of all types of cost pressures, including cost-increasing health technologies recommended by NICE, but such displacements were not direct responses to the publication of individual NICE TAs. The additional cost pressure represented by a new NICE TA is likely to be accommodated at least partly by greater efficiency and increased expenditure rather than displacement of services.Electronic supplementary materialThe online version of this article (doi:10.1186/s12913-016-1354-1) contains supplementary material, which is available to authorized users.
Population forecasters have predicted that the proportion of people in the UK aged 65 and above will rise significantly in coming decades. This shift in demographics will put increasing pressure on the NHS and providers of social care. However, older people do not rely only on care provided by the state; informal care of the elderly is often supplied by family and friends. Therefore, the relationship between formal and informal care and the reaction of informal carers to institutional changes is an important policy issue. This study uses individual-level data from the British Household Panel Survey to estimate the effects of the introduction of free personal care for the elderly in Scotland on informal care behaviour. As the change in policy applied only to Scotland, a natural experiment is formed allowing a difference-indifferences approach to be used. This paper finds that the introduction of the policy increased the probability of supplying informal care by 3 to 5 percentage points. In addition, it reports evidence of a shift in the hours of care distribution towards the lower tail as a result of the change in policy.
Population forecasters have predicted that the proportion of people in the UK aged 65 years and older will rise significantly in coming decades. This shift in demographics will put increasing pressure on the National Health Service and providers of social care. However, older people do not rely only on care provided by the state; informal care of the elderly is often supplied by family and friends. Therefore, the relationship between formal and informal care and the reaction of informal carers to institutional changes is an important policy issue. This study uses individual level data from the British Household Panel Survey to estimate the effects of the introduction of free personal care for the elderly in Scotland on informal care behaviour. As the change in policy applied only to Scotland, a natural experiment is formed allowing a difference-in-differences approach to be used. This paper finds that the introduction of the policy increased the probability of women supplying informal care by around six percentage points. In addition, for both sexes, it reports evidence of a shift away from the upper and lower tails towards the middle of the hours of care distribution as a result of the change in policy.
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