In its April issue, Health Affairs examines how all high-income countries are struggling to achieve the so-called “Triple Aim” – better health and better health care at lower cost. The articles in this issue find that the United States and other high-income countries have much to learn with the “trade” in strategies and tactics likely to flow both ways.
Support for the April issue was made possible by The Commonwealth Fund, Britain’s Nuffield Trust, and the Institute of Global Health Innovation at Imperial College London.
Drug payment and pricing – how do US practices compare with other countries?
A featured study by Panos Kanavos of the London School of Economics and Political Science and coauthors compared prescription drug prices among selected countries that are members of the Organization for Economic Cooperation and Development in 2005, 2007, and 2010. Depending on how prices were adjusted for the volume of drugs consumed in the various countries, drug prices in the United States were between 5 percent and nearly 200 percent higher than in the other nations studied. A key contributing factor is that the United States takes up use of new and more expensive prescription drugs faster than other countries. The authors recommend that the United States institute new procedures that would require pharmaceutical manufacturers to provide more evidence about the value of new drugs in relation to the cost before use of such drugs is reimbursed.
In a related article, Joshua Cohen of the Center for the Study of Drug Development at Tufts University and coauthors compared regulatory and reimbursement decisions about cancer drugs approved between 2000 and 2011 in the United States and four European countries. They found that in Europe, the evidence-based approach used by the countries’ health authorities affords lower prices for patients and payers when medications are considered cost-effective, although fewer of the new drugs were available to patients. In contrast, although US consumers had access to more oncology drugs, there is no systematic approach in the United States to evaluating these drugs’ cost-effectiveness. The lack of any such approach makes it very difficult for the United States to control escalating drug costs, drive improvements in health outcomes, and reduce inequities in access to care among those who can and can’t pay, the authors write.
Other articles comparing payment and pricing practices for prescription drugs and medical devices include the following:
- International Best Practices For Negotiating ‘Reimbursement Contracts’ With Price Rebates From Pharmaceutical Companies, Steven Morgan at the Centre for Health Services and Policy Research, University of British Columbia, and coauthors
- Evolving Reimbursement And Pricing Policies For Devices In Europe And The United States Should Encourage Greater Value, Corinna Sorenson at the London School of Economics and Political Science and coauthors
Additional lessons for the United States, including preventing a “Triple Fail”
Geraint Lewis, chief data officer of England’s National Health Service, and coauthors maintain that when countries implement Triple Aim goals across a country’s population, it is also critical to identify certain subgroups as at risk of “triple failures” – instances when all three goals of better health, better care, and lower cost are not met. By stratifying populations according to risk and anticipated response to an intervention, the authors argue, health systems could more effectively put in place measures to forestall such failures. They describe in their article how to plan and operationalize such approaches.
Launching insurance exchanges: other countries’ experiences
As the United States prepares for the launch of new health insurance exchanges, Ewout van Ginneken of the Berlin University of Technology in Germany and coauthors evaluate similar insurance market reforms in Switzerland (1996) and the Netherlands (2006) and offer five specific recommendations for the US exchanges. Both countries created managed competition in their health insurance markets and successfully addressed the multiple unforeseen issues arising during the implementation period. The lessons for the United States include the need to update risk-adjustment mechanisms and to address enrollment barriers, among others.
Hospital payment and governance abroad
A study by Wilm Quentin of Berlin University of Technology and co-authors analyzed hospital payment systems in five European countries (England, France, Germany, the Netherlands, and Sweden) and compared them to those in the United States. Similar to the US Medicare program, these European hospital payment systems are also based on diagnosis-related groups (DRGs) and prospective payment. However, European countries have substantially altered, and arguably improved upon, the original US formula that they adopted. The authors identify a variety of payment design options from Europe and suggest that these potential innovations could be used to reform DRG-based hospital payments in the United States.
Another study comparing hospitals, by Ashish Jha and Arnold Epstein of Harvard School of Public Health, surveyed the chairs of British hospitals, and compared the results to their 2010 study of US hospital board chairs. They found that English board chairs had more expertise in quality-of-care issues and spent a greater proportion of their time on quality of care than their US counterparts. However, they also found that like their American counterparts, many English board chairs overestimated the quality performance of their hospitals, suggesting that there is room for improving board expertise in both countries.