Value-Based Healthcare in Germany from Free Price-Setting to a Regulated Market
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A report from The Economist Intelligence Unit Value-based Healthcare in Germany From free price-setting to a regulated market SPONSORED BY: Value-based healthcare in Germany From free price-setting to a regulated market Contents About this report 2 Introduction 3 Chapter 1: The evolution of health technology assessment and pharmaceutical pricing reform 5 Chapter 2: New focus on providers and outcomes 9 Conclusion 13 © The Economist Intelligence Unit Limited 2015 1 Value-based healthcare in Germany From free price-setting to a regulated market About this report Value-based healthcare in Germany: From free and experience: price-setting to a regulated market is a report l Dr Clemens Guth, executive director, Artemed by The Economist Intelligence Unit (EIU), commissioned by Gilead Sciences. It looks at the l Dr Günther Jonitz, president, Berlin Chamber evolution of health technology assessment and of Physicians pharmaceutical pricing reform in Germany and l Dr Axel Mühlbacher, professor of health examines the new focus on providers and health economics and healthcare management, outcomes. Hochschule Neubrandenburg In July-August 2015 The EIU conducted l Dr Thorsten Schlomm, professor of urology four interviews with experts on value-based and member of faculty, Martini-Klinik healthcare in Germany, including senior The EIU bears sole responsibility for the content healthcare executives and practitioners as well of this report. The findings and views expressed as academics. The insights from these in-depth in the report do not necessarily reflect the views interviews appear throughout the report. The of the sponsor. Andrea Chipman was the author of EIU would like to thank the following individuals the report, and Martin Koehring was the editor. (listed alphabetically) for sharing their insight September 2015 2 © The Economist Intelligence Unit Limited 2015 Value-based healthcare in Germany From free price-setting to a regulated market Introduction Germany has one of the oldest national government is trying to evaluate health healthcare systems in Europe, and for the last outcomes. Some of the most controversial 15 years it has had an infrastructure in place reforms in recent years have involved the for assessing new medications, treatments and assessment and pricing of pharmaceutical healthcare pathways. Yet despite its leadership products, the reverberations of which are still in these areas, the German healthcare system being felt in the German drug market. In 2011 has come relatively late to focusing on health Germany imposed maximum reimbursement outcomes. prices for all new reimbursable treatments following the assessment of their added In recent years, however, this has begun to therapeutic value. This put an end to the free change, spurred on partly by greater demand pricing era in Germany. from patients and by a string of media stories that have drawn attention to the quality of The efficiency frontier is the approach chosen healthcare. in Germany to assess costs and benefits of therapeutic alternatives within a therapy area. At the same time, despite a series of reforms, However, as will be discussed in Chapter 1, this most of these stories have been centred on approach is not yet used systematically, and the process of delivering care, rather than on the system will have to be adapted accordingly, measuring patient outcomes and experiences. because this methodology is relatively new. “The term ‘value-based healthcare’ doesn’t The most recent set of healthcare legislation,1 translate well into German,” says Dr Clemens which is going through its final readings in the Guth, executive director of Artemed, a private Bundestag (the German parliament) before hospital and nursing-home operator in Germany, coming into effect in January 2016, contains and co-author of a book on value-based measures to carry out benefit assessments of 1 Federal Ministry of Health, healthcare in Germany with Michael Porter, a medical devices and to evaluate the quality “Krankenhausversorgung Harvard University professor who coined the of healthcare, including the introduction of zukunftsfest machen”, term. Value-based healthcare looks at health discounts and surcharges depending on the July 2nd 2015. Available at outcomes of treatment relative to cost. quality of the services provided. The new http://www.bmg.bund.de/ legislation will also aim to make the quality presse/pressemitteilungen/ pressemitteilungen-2015-3/ Nevertheless, there are signs that the reports of hospitals more patient-friendly. khsg-bundestag.html © The Economist Intelligence Unit Limited 2015 3 Value-based healthcare in Germany From free price-setting to a regulated market Meanwhile, a few hospitals around the country, Germany), already provide insightful lessons in notably the Martini-Klinik (a specialist centre how to improve the experience of patients (see for prostate surgery in Hamburg, northern case study in Chapter 2). 4 © The Economist Intelligence Unit Limited 2015 Value-based healthcare in Germany From free price-setting to a regulated market Chapter 1: The evolution of health technology assessment and 1 pharmaceutical pricing reform Germany’s healthcare system and health with the country’s 16 Länder (states) and technology assessment (HTA) regime have been designated self-governing institutions. in place for more than a decade. Yet efforts to measure quality have largely emphasised cost The focal point for decision-making at the savings in recent years, and the ultimate impact of nexus of these government institutions is initiatives involving the pharmaceutical industry the Federal Joint Committee (Gemeinsamer are still being weighed up. Bundesausschuss, or G-BA), established in 2004 with responsibility for both appraisal and decision-making in the ambulatory and inpatient A venerable system… sectors. An independent, self-governing body Although Germany’s health insurance system with the ability to issue directives, the G-BA is dates back to Bismarck’s social legislation in the the paramount decision-making body in the SHI late 19th century, much of the country’s current system and co-ordinates HTA.2 decision-making structure is considerably more recent. The G-BA includes the Medical Evaluation Subcommittee, which prioritises technologies Like other European countries, Germany for evaluation, requests the submission of guarantees healthcare to all citizens, but expert evidence and assesses its quality, and unlike many of its neighbours, which fund recommends whether technologies should health coverage through general taxation, be included in the SHI benefits package. A 2 most Germans are covered by the Statutory Velasco-Garrido, M, A separate Valuation Committee, which includes Zentner and R Busse, Health Insurance (SHI) system (Gesetzliche representatives of physicians’ associations and “Health systems, health Krankenversicherung, or GKV), which consists of the SHI, determines which technologies will be policy and health 134 sickness funds financed by both employee reimbursed. technology assessment”, and employer payroll taxes. Just 11% of Germans in: Velasco-Garrido, M, R Borlum Kristensen et al are covered by private health insurance. There are two main HTA agencies that help to (eds), Health technology co-ordinate the data on which the G-BA bases its While Germany’s federal government has no role assessment and health decisions. First, the German Agency for Health in healthcare delivery, it shares responsibility for policy-making in Europe– Technology Assessment (Deutsche Agentur für Current status, challenges public health and the management of hospital Health Technology Assessment, or DAHTA) is and potential. Copenhagen: budgets as well as regulatory decision-making charged with establishing and maintaining a WHO Regional Office for Europe, 2008, pp. 53-78. © The Economist Intelligence Unit Limited 2015 5 Value-based healthcare in Germany From free price-setting to a regulated market database system, including its own HTA reports cost-effectiveness ratio (ICER) approach, which as well as those produced by other national and measures the difference in costs between two international organisations. The DAHTA evaluates possible interventions divided by the difference in HTA reports for inclusion in the information outcomes. Instead, the IQWiG judges treatments system. according to their “efficiency frontier”, in which all available compounds are compared Second, the Institute for Quality and Efficiency using the total benefits in relation to their total in Health Care (Institut für Qualität und costs. However, at the time of its introduction Wirtschaftlichkeit im Gesundheitswesen, or the efficiency frontier approach lacked real-life IQWiG), now the leading HTA body compiling examples of its use in the healthcare space, not reports for the G-BA, produces evidence-based 4 only in Germany but also everywhere else. 3 “Pharmaceutical HTA and guidelines for epidemiologically important Reimbursement Process – diseases, acts on requests for HTA from the G-BA “The theoretical idea of the efficiency frontier Germany”, ISPOR Global Health Systems Road Map. and occasionally the Federal Ministry of Health, is that we take findings from clinical trials and, Available at http://www. gives recommendations to the G-BA for drugs, based on these clinical data, try to identify ispor.org/htaroadmaps/ operating procedures and medical devices, and the best strategy within a disease class or germany.asp produces reports. It currently has a budget of treatment,” says Axel Mühlbacher,