A note on the trade-off between waiting times and quality in a constrained hospital market.

While aging population and technological innovation are expected to increase healthcare demand in the future, increase in healthcare spending is not likely to be sustainable in times of fiscal constraint. This might lead to a tightening of hospital capacity and, potentially, to higher patient waiting times. This paper studies waiting times and quality in a healthcare market where semi-altruistic hospitals operate at full capacity. We show that in this context a trade-off between waiting times and quality emerges which, if hospitals dislike patients to wait, decreases the incentive for the quality of care. We also show that, when hospitals operate at full capacity, standard waiting time policies involving targets and penalties (e.g., "Targets and Terror" in England) can meet the target at the expense of a lower quality of care, with relevant implications for the empirical evaluation of waiting time policy.

Linking the Price of Cancer Drug Treatments to Their Clinical Value.

BACKGROUND AND OBJECTIVE: Appropriate pricing of medications is one of the ultimate goals for decision makers, but reliable data on the risk/benefit ratio are often lacking when a Marketing Authorization Application is submitted. Here we propose a method to consistently evaluate price adequacy, which we applied to six anticancer medications approved in Italy in recent years. METHODS: We obtained ratios of cost per survival per day (cost/survival/day) by dividing the total costs of evaluated medications for the median survival gain in days. Each cost/survival/day corresponds to a crude score, with 0 assigned to a cost/survival/day ≥€586. The maximum price considered as adequate was €91 cost/survival/day (score 75) while a score of 100 corresponded to a cost/survival/day ≤€11, based on the thresholds set by the British National Health System (NHS) and the "willingness-to-pay" of the Italian NHS. Crude scores were then adjusted using correction factors for efficacy, safety, quality of life, and prevalence of disease. RESULTS: None of the analyzed medications (abiraterone, afatinib, aflibercept, bevacizumab, dabrafenib, and ipilimumab) achieved a final score of 75, corresponding to adequate pricing. The final score for afatinib was the highest with 55 points. Prices of all the other drugs resulted in being inadequate, with negative final scores for bevacizumab, dabrafenib, and ipilimumab. CONCLUSIONS: This method may be considered a tool for the evaluation of appropriateness of price proposed at negotiation and could represent a reliable resource for decision-making. Furthermore, this analysis suggests that most recently approved cancer drugs in Italy do not fulfill price adequacy.

Do the current performance-based schemes in Italy really work? "Success fee": a novel measure for cost-containment of drug expenditure.

BACKGROUND: Drug costs have risen rapidly in the last decade, driving third-party payers to adopt performance-based agreements that provide either a discount before payment or an ex post reimbursement on the basis of treatments' effectiveness and/or safety issues. OBJECTIVES: This article analyses the strategies currently approved in Italy and proposes a novel model called "success fee" to improve payment-by-result schemes and to guarantee patients rapid access to novel therapies. METHODS: A review of the existing risk-sharing schemes in Italy has been performed, and data provided by the Italian National report (2012) on drug use have been analyzed to assess the impact on drug expenditure deriving from the application of "traditional" performance-based strategies since their introduction in 2006. RESULTS: Such schemes have poorly contributed to the fulfillment of the purpose in Italy, producing a trifling refund, compared with relevant drugs costs for the National Health System : €121 million out of a total of €3696 million paid. The novel risk-sharing agreement called "success fee" has been adopted for a new high-cost therapy approved for idiopathic pulmonary fibrosis, pirfenidone, and consists of an ex post payment made by the National Health System to the manufacturer for those patients who received a real benefit from treatment. CONCLUSIONS: "Success fee" represents an effective strategy to promote value-based pricing, making available to patients a rapid access to innovative and expensive therapies, with an affordable impact on drug expenditure and, simultaneously, ensuring third-party payers to share with manufacturers the risk deriving from uncertain safety and effectiveness.

The effects of reimbursement mechanisms on medical technology diffusion in the hospital sector in the Italian NHS.

OBJECTIVES: The aim of this study was to investigate how the differences across the regional reimbursement mechanisms and in particular the use of the DRGs impact on the level in the high technology equipment diffusion. METHODS: Based on hospital sector data at a regional level we build up indicators to measure the regional diffusion of high technological medical equipment in the period 1997-2007. These indicators are regressed on regional healthcare characteristics to investigate the relationship between the different reimbursement systems offered by Italian regions and the level of high technological medical equipment. RESULTS: Our results suggest that the per-case payment system is generally associated with a lower level of regional technology endowment per million of inhabitants, especially for the complex and expensive medical equipment. CONCLUSIONS: Our findings cast some doubts that an effective regulation of reimbursement mechanisms cannot limit the excessive diffusion of medical equipment that is a relevant driver of the increase in expenditure.