Financial incentives and prescribing behavior in primary care.

Many healthcare systems prohibit primary care physicians from dispensing the drugs they prescribe due to concerns that this encourages excessive, ineffective or unnecessarily costly prescribing. Using data from the English National Health Service for 2011-2018, we estimate the impact of physician dispensing rights on prescribing behavior at the extensive margin (comparing practices that dispense and those that do not) and the intensive margin (comparing practices with different proportions of patients to whom they dispense). We control for practices selecting into dispensing based on observable (OLS, entropy balancing) and unobservable practice characteristics (2SLS). We find that physician dispensing increases drug costs per patient by 3.1%, due to more, and more expensive, drugs being prescribed. Reimbursement is partly based on a fixed fee per package dispensed and we find that dispensing practices prescribe smaller packages. As the proportion of the practice population for whom they can dispense increases, dispensing practices behave more like non-dispensing practices.

Dynamic HTA for digital health solutions: opportunities and challenges for patient-centered evaluation.

OBJECTIVES: Germany's 2019 Digital Healthcare Act (Digitale-Versorgung-Gesetz, or DVG) created a number of opportunities for the digital transformation of the healthcare delivery system. Key among these was the creation of a reimbursement pathway for patient-centered digital health applications (digitale Gesundheitsanwendungen, or DiGA). Worldwide, this is the first structured pathway for "prescribable" health applications at scale. As of October 10, 2023, 49 DiGA were listed in the official directory maintained by Germany's Federal Institute for Drugs and Medical Devices (BfArM); these are prescribable by physicians and psychotherapists and reimbursed by the German statutory health insurance system for all its 73 million beneficiaries. Looking ahead, a major challenge facing DiGA manufacturers will be the generation of the evidence required for ongoing price negotiations and reimbursement. Current health technology assessment (HTA) methods will need to be adapted for DiGA. METHODS: We describe the core issues that distinguish HTA in this setting: (i) explicit allowance for more flexible research designs, (ii) the nature of initial evidence generation, which can be delivered (in its final form) up to one year after becoming reimbursable, and (iii) the dynamic nature of both product development and product evaluation. We present the digital health applications in the German DiGA scheme as a case study and highlight the role of RWE in the successful evaluation of DiGA on an ongoing basis. RESULTS: When a DiGA is likely to be updated and assessed regularly, full-scale RCTs are infeasible; we therefore make the case for using real-world data and real-world evidence (RWE) for dynamic HTAs. CONCLUSIONS: Continous evaluation using RWD is a regulatory innovation that can help improve the quality of DiGAs on the market.

More cost-sharing, less cost? Evidence on reference price drugs.

This paper evaluates the causal effects of changes in reference prices (RP) on prices, copayments, and overall expenditures for off-patent pharmaceuticals. With reference pricing, firms set prices freely and the health plan covers the expenses only up to a certain threshold. We use quarterly data of the German market for anti-epileptics at the package level and at the active substance level and exploit that the RP has been adjusted in some of the active substances but not in others in a difference-in-differences framework. At the product level, we find that a lower RP reduces prices for both brand-name drugs and generics, but leads to higher copayments, especially for brand-name drugs. At the aggregate level, we find that a lower RP leads to savings for the public health insurer since revenues decrease substantially for brand-name firms and, to a lesser extent, also for generic firms. Overall expenditures (payments by the health insurer and the patients) for brand-name drugs decrease in proportion to the decrease in the RP, while the adjustment does not significantly influence overall expenditures for generics.

Paying for the view? How nursing home prices affect certified staffing ratios.

Many countries limit public and private reimbursement for nursing care costs for social or financial reasons. Still, quality varies across nursing homes. We explore the causal link between case-mix adjusted nurse staffing ratios as an indicator of care quality and different price components in Swiss nursing homes. The Swiss reimbursement system limits and subsidizes the care price at the cantonal level, which implicitly limits staffing ratios, while the residents cover the nursing home-specific lodging price privately. To estimate causal effects, we exploit (i) the exogeneity of the Swiss care price regulation, (ii) nursing-home fixed effects estimations and (iii) instrumental variables for the lodging price. Our estimates show a positive impact of prices on certified staffing ratios. We find that a 10% increase in care prices increases certified staffing ratios by 3-4%. A comparable 10% increase in lodging prices raises certified staffing ratios by 1.5-10% (depending on the model). Our findings highlight that price limits for nursing care impose a limit on staffing ratios. Furthermore, our results indicate that providers circumvent price limits by increasing lodging prices that are privately covered. Thus, this cost shifting implicitly shifts the financial burden to the residents.

[Frequency of diagnosed non-alcololic fatty liver disease (NAFLD) in the German population - An analysis based on health insurance data]. / Die Häufigkeit von diagnostizierten Fettlebererkrankungen (NAFLD) in der deutschen Bevölkerung ­ Eine Analyse auf der Basis von GKV-Routinedaten.

BACKGROUND: Non-alcoholic fatty liver disease (NAFLD) is one of the most common chronic liver diseases in Germany. In the long term, there is an increased risk of developing liver cirrhosis and subsequent diseases. Epidemiologic studies on NAFLD prevalence in Germany are scarce. The aim of the study was to assess administrative incidence and prevalence or, more specifically, the number of patients diagnosed with NAFLD in the period from 2008 to 2018. METHODS: Analyses are based on administrative data of a large statutory health insurance fund. All individuals who were insured in the year of analysis and in the three-year pre-observation period were included (between 1.7-2 million insured per analysis year). NAFLD-patients were identified using relevant ICD-10 codes (K76.0 und K75.8). RESULTS: In 2018, 4.66 % of insured persons had a NAFLD diagnosis, 0.87 % were diagnosed first-time. Diagnoses of nonalcoholic steatohepatitis (NASH) were comparatively rare (0.09 %). Data show an uptake of NAFLD diagnoses over time. The number of incident cases per year has hardly changed. Patients with diseases of the metabolic syndrome had an increased chance of being diagnosed with NAFLD. CONCLUSION: It becomes evident that NAFLD is frequently diagnosed in everyday medical practice, although data from population-based studies suggest an even higher prevalence.

The Impact Of Price Regulation On The Availability Of New Drugs In Germany.

The 2011 German Pharmaceutical Market Restructuring Act subjected brand-name drugs for nonrare diseases to price regulation based on an assessment of their clinical benefit. Indication-specific assessment outcomes range from major added benefit to less benefit than the appropriate comparator(s) and affect price negotiations beyond the first year on the market. Using data on drugs that entered the market in the period 2012-16, we evaluated benefit assessment findings, subsequent drug exits, and their correlates. We considered 171 drug-indication pairs, corresponding to 138 different drugs. Of these, 66 drug-indication pairs (55 different drugs) were found to have added benefit. Almost all drugs with a positive benefit assessment (98 percent) remained on the market, while drugs without a positive benefit assessment were over ten times more likely to exit (25 percent versus 2 percent). US policy makers considering how to address rapidly increasing drug costs may draw valuable lessons from the German experience.

Tiered co-payments, pricing, and demand in reference price markets for pharmaceuticals.

Health insurance companies curb price-insensitive behavior and the moral hazard of insureds by means of cost-sharing, such as tiered co-payments or reference pricing in drug markets. This paper evaluates the effect of price limits - below which drugs are exempt from co-payments - on prices and on demand. First, using a difference-in-differences estimation strategy, we find that the new policy decreases prices by 5 percent for generics and increases prices by 4 percent for brand-name drugs in the German reference price market. Second, estimating a nested-logit demand model, we show that consumers appreciate co-payment exempt drugs and calculate lower price elasticities for brand-name drugs than for generics. This explains the different price responses of brand-name and generic drugs and shows that price-related co-payment tiers are an effective tool to steer demand to low-priced drugs.

Higher prices, higher quality? Evidence from German nursing homes.

OBJECTIVES: This study investigates the relationship between prices and quality of 7400 German nursing homes. METHOD: We use a cross section of public quality reports for all German nursing homes, which had been evaluated between 2010 and 2013 by external institutions. Our analysis is based on multivariate regressions in a two stage least squares framework, where we instrument prices to explain their effect on quality controlling for income, nursing home density, demographics, labour market characteristics, and infrastructure at the regional level. RESULTS: Descriptive analysis shows that prices and quality do not only vary across nursing homes, but also across counties and federal states and that quality and prices correlate positively. Second, the econometric analysis, which accounts for the endogenous relation between negotiated price and reported quality, shows that quality indeed positively depends on prices. In addition, more places in nursing homes per people in need are correlated with both lower prices and higher quality. Finally, unobserved factors at the federal state level capture some of the variation of reported quality across nursing homes. CONCLUSION: Our results suggest that higher prices increase quality. Furthermore, since reported quality and prices vary substantially across federal states, we conclude that the quality and prices of long-term care facilities may well be compared within federal states but not across.

The welfare impact of parallel imports: a structural approach applied to the German market for oral anti-diabetics.

We investigate the welfare impact of parallel imports using a large panel dataset containing monthly information on sales, ex-factory prices, and further product characteristics for all 649 anti-diabetic drugs sold in Germany between 2004 and 2010. We estimate a two-stage nested logit model of demand, and on the basis of an oligopolistic model of multi-product firms, we then recover the marginal costs and markups. We finally evaluate the effect of the parallel imports' policy by calculating a counterfactual scenario without parallel trade. According to our estimates, parallel imports reduce the prices for patented drugs by 11% and do not have a significant effect on prices for generic drugs. This amounts to an increase in the demand-side surplus by €19 million per year (or €130 million in total), which is relatively small compared with the average annual market size of around €227 million based on ex-factory prices. The variable profits for the manufacturers of original drugs from the German market are reduced by €18 million (or 37%) per year when parallel trade is allowed, yet only one third of this difference is appropriated by the importers.

Profit efficiency and ownership of German hospitals.

This paper investigates the cost and profit efficiency of German hospitals and their variation with ownership type. It is motivated by the empirical finding that private (for-profit) hospitals - having been shown to be less cost efficient in the past - on average earn higher profits than public hospitals. We conduct a Stochastic Frontier Analysis on a multifaceted administrative German data set combined with the balance sheets of 541 hospitals of the years 2002-2006. The results show no significant differences in cost efficiency but higher profit efficiency of private than of publicly owned hospitals.

Cost and technical efficiency of German hospitals: does ownership matter?

This paper is the first to investigate both the technical and cost efficiency of more than 1500 German general hospitals. More specifically, it deals with the question how hospital efficiency varies with ownership, patient structure, and other exogenous factors, which are neither inputs to nor outputs of the production process. The empirical results for the years from 2001 to 2003 indicate that private and non-profit hospitals are on average less cost efficient and less technically efficient than publicly owned hospitals. The hospital rankings based on estimated efficiency scores turn out to be negatively correlated with average length of stay, which is highest in private hospitals. The results are derived by conducting a Stochastic Frontier Analysis assuming both Cobb-Douglas and translog production technologies and using a newly available and multifaceted administrative German data set.