Value-based payment for high-cost treatments in Singapore: a qualitative study of stakeholders' perspectives.

OBJECTIVES: The rising costs of drugs have necessitated the exploration of innovative payment methods in healthcare systems. Risk-sharing agreements (RSAs) have been implemented in many countries as a value-based payment mechanism to manage the uncertainty associated with expensive technologies. This study aimed to investigate stakeholder perspectives on value-based payment in the Singaporean context, providing insights for future directions in health technology assessment and financing. METHODS: This descriptive qualitative inquiry involved participant interviews conducted between October 2021 and April 2022. Thematic analysis was conducted in two phases to analyze the interview transcripts. RESULTS: Seventeen respondents participated in the study, and five key themes emerged from the analysis. Stakeholders viewed RSAs as moderately positive, despite limited experience with them. They emphasized the importance of clearly defining objectives and establishing transparent criteria for implementing these schemes. The current data infrastructure was identified as both a barrier and facilitator, as RSAs impose administrative burdens. To successfully implement these payment mechanisms, capacity building, and effective stakeholder engagement that fosters mutual trust and cocreation are crucial. CONCLUSION: This study confirms previously identified barriers and facilitators to successful RSA implementation while contextualizing them within the Singaporean setting. The findings suggest that value-based payment has the potential to address uncertainty and improve access to healthcare technologies, but these barriers must be addressed for the schemes to be effective.

Performance-based risk-sharing arrangements for devices and procedures in cardiac electrophysiology: an innovative perspective.

There is an increasing pressure on demonstrating the value of medical interventions and medical technologies resulting in the proposal of new approaches for implementation in the daily practice of innovative treatments that might carry a substantial cost. While originally mainly adopted by pharmaceutical companies, in recent years medical technology companies have initiated novel value-based arrangements for using medical devices, in the form of 'outcomes-based contracts', 'performance-based contracts', or 'risk-sharing agreements'. These are all characterized by linking coverage, reimbursement, or payment for the innovative treatment to the attainment of pre-specified clinical outcomes. Risk-sharing agreements have been promoted also in the field of electrophysiology and offer the possibility to demonstrate the value of specific innovative technologies proposed in this rapidly advancing field, while relieving hospitals from taking on the whole financial risk themselves. Physicians deeply involved in the field of devices and technologies for arrhythmia management and invasive electrophysiology need to be prepared for involvement as stakeholders. This may imply engagement in the evaluation of risk-sharing agreements and specifically, in the process of assessment of technology performances or patient outcomes. Scientific Associations may have an important role in promoting the basis for value-based assessments, in promoting educational initiatives to help assess the determinants of the learning curve for innovative treatments, and in promoting large-scale registries for a precise assessment of patient outcomes and of specific technologies' performance.

How do insurance firms respond to financial risk sharing regulations? Evidence from the Affordable Care Act.

Many insurance markets have reinstated premium stabilization programs to ensure financial protection from market volatility. In this paper, we focus on one such regulation-risk corridors (RCs)-in the context of the Health Insurance Marketplaces established under the Affordable Care Act. We develop a model to show how the program provided incentives for some insurers to lower their premiums. The RCs program was defunded unexpectedly for coverage year 2016, before its legislated end in 2016. Consistent with the model, we find that making a RCs claim before the program ended is associated with higher premium growth after the program's demise. The model and empirical evidence are consistent with the view that the end of the RCs program contributed to premium growth in the Marketplaces.

International experience with performance-based risk-sharing arrangements: implications for the Chinese innovative pharmaceutical market.

OBJECTIVES: Various forms of outcomes-based or risk-sharing agreements have been implemented since early 2000s as a way of access to innovative medicinal products. This study aims to summarize the international experience of performance-based risk-sharing arrangements (PBRSAs) and identify the preconditions for a successful implementation of such schemes. Their implications for the Chinese healthcare market are discussed. METHODS: A systematic literature review (in PubMed) was conducted to review the evidence on the nature and performance of PBRSAs in the past 10 years. Grey literature was searched for reports in government websites of the countries in scope. RESULTS: The search identifies 463 records from PubMed and 3 additional records from other sources. Thirty-one publications are included in the final review. The following preconditions were identified to support a successful implementation of PBRSAs: (1) Identify meaningful and feasible outcome measurements; (2) Establish an effective and efficient data collection infrastructure; (3) Control of the implementation costs; (4) Develop governance and administrative infrastructure to allow delisting and rebate/refund; (5) Clarify personal data protection issues. CONCLUSIONS: The implementation of PBRSAs has proven to be challenging. Although the Chinese healthcare system is not yet well equipped to implement such schemes, some recent changes may pave the way to successful PBRSAs for particular innovative products.

Strategy and risk sharing in hospital-postacute care integration.

ISSUE/TREND: Postacute care has been identified as a primary area for cost containment. The continued shift of payment structures from volume to value has often put hospitals at the forefront of addressing postacute care cost containment. However, hospitals continue to struggle with models to manage patients in postacute care institutions, such as skilled nursing facilities or in home health agencies. Recent research has identified postacute care network development as one mechanism to improve outcomes for patients sent to postacute care providers. Many hospitals, though, have not utilized this strategy for fear of not adhering to Centers for Medicare & Medicaid Services requirements that patients are given choice when discharged to postacute care. MANAGERIAL APPROACH: A hospital's approach to postacute care integration will be dictated by environmental uncertainty and the level of embeddedness hospitals have with potential postacute care partners. Hospitals, though, must also consider how and when to extend shared savings to postacute care partners, which will be based on the complexity of the risk-sharing calculation, the ability to maintain network flexibility, and the potential benefits of preserving competition and innovation among the network members. For hospital leaders, postacute care network development should include a robust and transparent data management process, start with an embedded network that maintains network design flexibility, and include a care management approach that includes patient-level coordination. CONCLUSION: The design of care management models could benefit from elevating the role of postacute care providers in the current array of risk-based payment models, and these providers should consider developing deeper relationships with select postacute care providers to achieve cost containment.

When are Pharmaceuticals Priced Fairly? An Alternative Risk-Sharing Model for Pharmaceutical Pricing.

The most common solutions to the problem of high pharmaceutical prices have taken the form of regulations, price negotiations, or changes in drug coverage by insurers. These measures for the most part transfer the burden of drug expenditures between pharmaceutical companies and payers or between payers. The aim of this study is to propose an alternative model for the relationship between the main stakeholders (the pharmaceutical companies, third party payers, and the public) involved in the price setting and purchasing of pharmaceuticals, one that encourages a more cooperative approach. We draw from principles of ethics and health economics and apply them to the context of the pharmaceutical industry. The model prioritises two objectives, (1) to make drugs financially accessible to the patients who need them, and (2) to keep pharmaceutical companies viable and profitable. It is centered around the sharing of financial risk between the main stakeholders, which we describe as 'enlightened risk sharing'. After establishing the foundations of this model, we expand on the type of policies that can follow these principles with current day examples.

Assessing national and subnational inequalities in medical care utilization and financial risk protection in Rwanda.

BACKGROUND: Ensuring equitable access to medical care with financial risk protection has been at the center of achieving universal health coverage. In this paper, we assess the levels and trends of inequalities in medical care utilization and household catastrophic health spending (HCHS) at the national and sub-national levels in Rwanda. METHODS: Using the Rwanda Integrated Living Conditions Surveys of 2005, 2010, 2014, and 2016, we applied multivariable logit models to generate the levels and trends of adjusted inequalities in medical care utilization and HCHS across the four survey years by four socio-demographic dimensions: poverty, gender, education, and residence. We measured the national- and district-level inequalities in both absolute and relative terms. RESULTS: At the national level, after controlling for other factors, we found significant inequalities in medical care utilization by poverty and education and -in HCHS by poverty in all four years. From 2005 to 2016, inequalities in medical care utilization by the four dimensions did not change significantly, while the inequality in HCHS by poverty was reduced significantly. At the district level, inequalities in both medical care utilization and HCHS were larger than zero in all four years and decreased over time. CONCLUSIONS: Poverty and poor education were significant contributors to inequalities in medical care utilization and HCHS in Rwanda. Policies or interventions targeting poor households or households headed by persons receiving no education are needed in order to effectively reduce inequalities in medical care utilization and HCHS.

Impact of out of pocket payments on financial risk protection indicators in a setting with no user fees: the case of Mauritius.

BACKGROUND: Mauritius embraces principles of a welfare state with free health care at point of use in any public facilities. However, the health financing landscape changed in 2007 when Private Health Expenditure (PvtHE) surpassed General Government Health Expenditure. PvtHE is predominately out of pocket (OOP) with only 3.4% related to premiums for private insurance. In 2014, Household OOP Expenditure on health accounted for 52.8% of total health expenditure. OOP is known to be regressive and to impact negatively on households' living standards. OBJECTIVES: This paper aims to examine trends in OOP in Mauritius, to assess its impacts through an analysis of key indicators of financial protection, namely catastrophic health expenditure (CHE) and impoverishment due to OOP health expenditure. It also aims to predict core determinants of CHEs. METHODS: Household Budget Surveys (HBS) of 2001/2002, 2006/2007 and 2012 were the primary source data. CHE and impoverishment were used to assess financial hardships resulting from OOP health payments. The incidence of CHE was estimated at three threshold levels (10,25 and 40%), using the budget share and the capacity to pay approaches. Impoverishment due to OOP was measured by changes in the incidence of poverty and intensity of poverty using the US$ 3.1 international poverty line. Logistic regression analysis was used to identify determinants of CHE. FINDINGS: Household CHE increased from 5.78% in 2001/02 to 8.85% in 2012 and 0.61% in 2001/02 to 1.25% in 2012, for 10 and 40% thresholds, respectively. The incidence of CHE was significantly higher in urban areas compared to rural areas. The highest levels of CHEs were among households' heads, who are retired rising from 1.62% in 2001/02 to 3.71% in 2012, followed by households' head who are widowed from 2.29% in 2001/02 to 2.63% in 2012 and homemakers from 2.12% in 2001/02 to 2.57% in 2012 at the 40% threshold. The share of households pushed below the poverty line due to OOP dropped from 0.4% in 2001/02 to 0.2% in 2006/07 before rising to 0.34% in 2012. In 2012, poverty gap occurred only among households under poorest quintile 1 (0.24%) and quintile 2 (0.03%). Overall poverty gap dropped from 0.08% in 2001/02 to 0.05% in 2012. Logistic regression analysis revealed that the odds ratio of facing CHE were significant only among households with heads being retired and with a presence of an elderly member in the household. CONCLUSION: Despite the rise in incidence of CHE between 2001 and 2012 the impact of OOP on the level of impoverishment and poverty gap has not been significant.

Revenue-sharing clubs provide economic insurance and incentives for sustainability in common-pool resource systems.

Harvesting behaviors of natural resource users, such as farmers, fishermen and aquaculturists, are shaped by season-to-season and day-to-day variability, or in other words risk. Here, we explore how risk-mitigation strategies can lead to sustainable use and improved management of common-pool natural resources. Over-exploitation of unmanaged natural resources, which lowers their long-term productivity, is a central challenge facing societies. While effective top-down management is a possible solution, it is not available if the resource is outside the jurisdictional bounds of any management entity, or if existing institutions cannot effectively impose sustainable-use rules. Under these conditions, alternative approaches to natural resource governance are required. Here, we study revenue-sharing clubs as a mechanism by which resource users can mitigate their income volatility and importantly, as a co-benefit, are also incentivized to reduce their effort, leading to reduced over-exploitation and improved resource governance. We use game theoretic analyses and agent-based modeling to determine the conditions in which revenue-sharing can be beneficial for resource management as well as resource users. We find that revenue-sharing agreements can emerge and lead to improvements in resource management when there is large variability in production/revenue and when this variability is uncorrelated across members of the revenue-sharing club. Further, we show that if members of the revenue-sharing collective can sell their product at a price premium, then the range of ecological and economic conditions under which revenue-sharing can be a tool for management greatly expands. These results have implications for the design of bottom-up management, where resource users themselves are incentivized to operate in ecologically sustainable and economically advantageous ways.

Payer and Pharmaceutical Manufacturer Considerations for Outcomes-Based Agreements in the United States.

BACKGROUND: Considerable interest exists among health care payers and pharmaceutical manufacturers in designing outcomes-based agreements (OBAs) for medications for which evidence on real-world effectiveness is limited at product launch. OBJECTIVES: To build hypothetical OBA models in which both payer and manufacturer can benefit. METHODS: Models were developed for a hypothetical hypercholesterolemia OBA, in which the OBA was assumed to increase market access for a newly marketed medication. Fixed inputs were drug and outcome event costs from the literature over a 1-year OBA period. Model estimates were developed using a range of inputs for medication effectiveness, medical cost offsets, and the treated population size. Positive or negative feedback to the manufacturer was incorporated on the basis of expectations of drug performance through changes in the reimbursement level. Model simulations demonstrated that parameters had the greatest impact on payer cost and manufacturer reimbursement. RESULTS: Models suggested that changes in the size of the population treated and drug effectiveness had the largest influence on reimbursement and costs. Despite sharing risk for potential product underperformance, manufacturer reimbursement increased relative to having no OBA, if the OBA improved market access for the new product. Although reduction in medical costs did not fully offset the cost of the medication, the payer could still save on net costs per patient relative to having no OBA by tying reimbursement to drug effectiveness. CONCLUSIONS: Pharmaceutical manufacturers and health care payers have demonstrated interest in OBAs, and under a certain set of assumptions both may benefit.

Evaluation of a pharmaceutical risk-sharing agreement when patients are screened for the probability of success.

We analyze a game-theoretic model of a risk-sharing agreement between a payer and a pharmaceutical firm. The drug manufacturer chooses the price while the payer sets the rebate rate and decides which patients are eligible for treatment. The manufacturer provides the payer with a rebate for nonresponding patients. We generalize on the existing literature, by making both price and rebate rate decision variables, allowing the rebate rate to be different from 100%, and incorporating 2 types of administrative costs. We identify a threshold for the expected probability of response for classifying the drug as a mass-market or niche type and investigate the optimal solutions for both types. We also identify a threshold for the rebate rate at which the net benefits become equal for responding and nonresponding patients. Through numerical examples, we examine how various parameters impact the drug manufacturer's and the payer's optimal solution.

Effect of informal financial support for health care on health Insurance uptake: Evidence from a mixed-methods study in Tamale metropolis of northern Ghana.

Attempts to study the determinants of health insurance enrollment in resource-poor settings have often given less consideration to the potential influence of informal risk-sharing systems on individuals and households' decisions about health insurance. This paper contributes to existing discussions in this area by examining the effect of informal financial support for health care, an example of informal risk-sharing arrangement, on enrollment in the Ghana National Health Insurance Scheme (NHIS). It is based on a mixed-methods research in Tamale metropolis of northern Ghana. The study found widespread availability and reliance on informal support among low-income households to finance out-of-pocket health-care expenditure. Informal financial support for enrollment into the NHIS was noted to be less available. The study further found less strong but suggestive evidence that the perceived availability of informal financial support for health care by individuals diminishes their enrollment in the NHIS. The paper emphasizes the need for theory and policy on health insurance uptake in resource-constrained settings to consider existing informal risk-sharing arrangements as much as other known determinants of enrollment.

Expanding Enrollment Without the Individual Mandate: Options to Bring More People into the Individual Market.

Issue: Recent changes to the Affordable Care Act, including elimination of the individual mandate penalty, the halting of federal payments for cost-sharing reductions, and expanded access to short-term plans, may reduce enrollment in the individual market. Goal: Analyze options to increase enrollment, accounting for recent policy changes. Methods: RAND's COMPARE microsimulation model is used to analyze six policies that would expand access to tax credits, increase their generosity, and fund a reinsurance program. Key Findings and Conclusions: The options would increase individual market enrollment by 400,000 to 3.2 million in 2020. Net increases in total enrollment (300,000 to 2.4 million) are smaller because of offsetting decreases in employer-sponsored insurance. The largest gains are possible through two options: large-scale investment in reinsurance, and extension of tax credits to higher-income people combined with increases in the generosity of existing tax credits. If funded through a fee on health plans, reinsurance could be implemented without increasing the federal deficit. Additional taxpayer costs would increase by $1 billion to $23 billion, depending on the policy. While enhanced tax credits for young adults would lead to small coverage gains, they would entail the lowest costs to taxpayers among the six options.

Assessing the Promise and Risks of Income-Based Third-Party Payment Programs.

Issue: Consumers' concerns about affordability limit participation in ACA marketplaces. Funded by local hospital systems and run by independent nonprofits, third-party payment (TPP) programs improve affordability for low-income consumers by paying premium costs not covered by tax credits. Goal: To assess the potential of TPP to make marketplace coverage more affordable, without harming insurance risk pools. Methods: Interviews in May and June 2016 with program administrators, hospital systems, carriers, and consumer groups in five localities and the Washington State marketplace. Key Findings: The most effective local program reached 1,148 people, or 25 percent of all eligible marketplace enrollees. Other local programs served between 202 and 934 consumers; the Washington State program reached 1,133. Findings suggest that without TPP, numerous beneficiaries would have remained uninsured. Hospitals funding these programs reported net financial benefits, with declines in uncompensated care exceeding program costs. Carriers reported no adverse selection in these carefully designed programs. Conclusions: Widespread adoption of TPP could help additional low-income consumers obtain marketplace coverage. Hospitals' financial gains from TPP programs make replication more feasible. However, broader policies, such as increased premium tax credits and cost-sharing reductions, are likely needed for major nationwide improvements to affordability.

Harvard Pilgrim's Patrick Cahill Tries To Make Sense of It All.

The 40-year-old vice president of regional markets for eastern Massachusetts wants enrollees and, especially, employers to know that there will continue to be a lot of public policy change as the ACA evolves. His course? Keep strengthening ties with providers.

Stabilizing individual health insurance markets with subsidized reinsurance.

Subsidized reinsurance represents a potentially important tool to help stabilize individual health insurance markets. This brief describes alternative forms of subsidized reinsurance and the mechanisms by which they spread risk and reduce premiums. It summarizes specific state initiatives and Congressional proposals that include subsidized reinsurance. It compares approaches to each other and to more direct subsidies of individual market enrollment. For a given amount of funding, a particular program's efficacy will depend on how it affects insurers' risk and the risk margins built into premiums, incentives for selecting or avoiding risks, incentives for coordinating and managing care, and the costs and complexity of administration. These effects warrant careful consideration by policymakers as they consider measures to achieve stability in the individual market in the long term.

New Hampshire Nurse Practitioners Take the Lead in Forming an Accountable Care Organization.

In 2012, New Hampshire nurse practitioners (NPs), along with Anthem Blue Cross/Blue Shield, formed the first Patient Centered Shared Savings Program in the nation, composed of patients managed by nurse practitioners employed within NP-owned and operated clinics. In this accountable care organization (ACO), NP-attributed patients were grouped into one risk pool. Data from the ACO and the NP risk pool, now in its third year, have produced compelling statistics. Nurse practitioners participating in this program have met or exceeded the minimum scores for 29 quality metrics along with a demonstrated cost-savings in the first 2 years of the program. Hospitalization rates for NP-managed patients are among the lowest in the state. Cost of care for NP-managed patients is $66.85 less per member per month than the participating physician-managed patients. Data from this ACO provide evidence that NPs provide cost-effective, quality health care and are integral to the formation and sustainability of any ACO.

If Congress Won't Salvage Reinsurance, State Waivers May Offer a Workaround.

Shards of a bipartisan effort to stabilize the individual health insurance markets emerged. They focused mostly on resurrecting the ACA cost-reduction payments and giving states flexibility to come up with their own ideas, like reinsurance, for shoring up the troubled individual market.

Medicare Part D and Portfolio Choice.

This study evaluates the impact of medical expenditure risk on portfolio choice among the elderly. The risk of large medical expenditures can be substantial for elderly individuals and is only partially mitigated by access to health insurance. The presence of deductibles, copayments, and other cost-sharing mechanisms implies that medical spending risk can be viewed as an undiversifiable background risk. Economic theory suggests that increases in background risk reduce the optimal financial risk that an individual or household is willing to bear (Pratt and Zeckhauser 1987; Elmendorf and Kimball 2000). In this study, we evaluate this hypothesis by estimating the impact of the introduction of the Medicare Part D program, which significantly reduced prescription drug spending risk for seniors, on portfolio choice.