Hostname: page-component-745bb68f8f-v2bm5 Total loading time: 0 Render date: 2025-01-10T22:11:46.291Z Has data issue: false hasContentIssue false
  • English
  • Français

The role of hospital payments in the adoption of new medical technologies: an international survey of current practice

Published online by Cambridge University Press:  17 October 2014

Corinna Sorenson ,
Michael Drummond ,
Aleksandra Torbica ,
Giuditta Callea  and
Ceu Mateus
Corinna Sorenson*
Affiliation:
Research Fellow, LSE Health, London School of Economics and Political Science, London, UK
Michael Drummond
Affiliation:
Professor of Health Economics, Centre for Health Economics, University of York, York, UK
Aleksandra Torbica
Affiliation:
Assistant Professor, CERGAS, Bocconi University, Milano, Italy
Giuditta Callea
Affiliation:
Research Fellow, CERGAS, Bocconi University, Milano, Italy
Ceu Mateus
Affiliation:
Assistant Professor, National School of Public Health, Nova University of Lisbon, Lisbon, Portugal
*
*Correspondence to: Corinna Sorenson, Research Fellow, LSE Health, London School of Economics and Political Science, Cowdray House, Houghton Street, London WC2A 2AE, UK. Email: [email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract

This study examined the role of prospective payment systems in the adoption of new medical technologies across different countries. A literature review was conducted to provide background for the study and guide development of a survey instrument. The survey was disseminated to hospital payment systems experts in 15 jurisdictions. Fifty-one surveys were disseminated, with 34 returned. The surveys returned covered 14 of the 15 jurisdictions invited to participate. The majority (71%) of countries update the patient classification system and/or payment tariffs on an annual basis to try to account for new technologies. Use of short-term separate or supplementary payments for new technologies occurs in 79% of countries to ensure adequate funding and facilitate adoption. A minority (43%) of countries use evidence of therapeutic benefit and/or costs to determine or update payment tariffs, although it is somewhat more common in establishing short-term payments. The main barrier to using evidence is uncertain or unavailable clinical evidence. Almost three-fourths of respondents believed diagnosis-related group systems incentivize or deter technology adoption, depending on the particular circumstances. Improvements are needed, such as enhanced strategies for evidence generation and linking evidence of value to payments, national and international collaboration and training to improve existing practice, and flexible timelines for short-term payments. Importantly, additional research is needed to understand how different payment policies impact technology uptake as well as quality of care and costs.

Type
Articles
Information
Health Economics, Policy and Law , Volume 10 , Issue 2 , April 2015 , pp. 133 - 159
Copyright
© Cambridge University Press 2014 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

References

Barnum, H., Kutzin, J. and Saxenian, H. (1995), ‘Incentives and provider payment methods’, International Journal of Health Planning and Management, 10: 23–45.Google ScholarPubMed
Busse, R., Geissler, A., Quentin, W. and Wiley, M. (2011), Diagnosis-Related Groups in Europe: Moving Towards Transparency, Efficiency, and Quality in Hospitals, New York: McGraw-Hill/Open University Press.Google Scholar
Cappellaro, G., Ghislandi, S. and Anessi-Pessina, E. (2011), ‘Diffusion of medical technology: the role of financing’, Health Policy, 100(1): 51–59.Google Scholar
Chalkidou, K., Tunis, S., Wicher, D., Fowler, R. and Zwarenstein, M. (2012), ‘The role of pragmatic randomized controlled trials (pRCTs) in comparative effectiveness research’, Clinical Trials, 9(4): 436–446.CrossRefGoogle ScholarPubMed
Clyde, A. T., Bockstedt, L., Farkas, J. A. and Jackson, C. (2008), ‘Experience with Medicare’s new technology add-on payment program’, Health Affairs, 27: 1632–1641.Google Scholar
Cutler, D. M. and McClellan, M. (2001), ‘Is technological change in medicine worth it?’, Health Affairs, 20: 11–29.Google Scholar
Department of Health (2011), Payment by Results Guidance for 2010–2011. London: Department of Health.Google Scholar
Dreyer, N. A., Tunis, S. R., Berger, M., Ollendorf, D., Mattox, P. and Gliklich, R. (2010), ‘Why observational studies should be among the tools used in comparative effectiveness research’, Health Affairs, 29(10): 1818–1825.Google Scholar
Drummond, M. F., Griffin, A. and Tarricone, R. (2009), ‘Economic evaluation for devices and drugs. Same or different?’, Value in Health, 12(4): 402–404.CrossRefGoogle ScholarPubMed
Fulop, N., Allen, P., Clarke, A. and Black, N. (2003), ‘From health technology assessments to research on the organization and delivery of health care services: addressing the balance’, Health Policy, 63(2): 155–165.CrossRefGoogle ScholarPubMed
Greenhalgh, T., Roberts, G., MacFarlane, F., Bate, P. and Kyriakidou, O. (2004), ‘Diffusion of innovations in service organizations: systematic review and recommendations’, Milbank Quarterly, 82: 581–629.Google Scholar
Henschke, C., Baumler, M., Weid, S., Gaskins, W. and Busse, R. (2010), ‘Extrabudgetary (“NUB”) payments: a gateway for introducing new medical devices into the German inpatient reimbursement system?’, Journal of Management & Marketing in Healthcare, 3: 119–133.CrossRefGoogle Scholar
Kesteloot, K. and Voet, N. (1998), ‘Incentives for cooperation in quality among hospitals – the impact of the reimbursement systems’, Journal of Health Economics, 17: 701–728.CrossRefGoogle Scholar
MedPAC (2003), ‘Payment for new technologies in Medicare’s prospective payment system’, In Report to the Congress: Medicare Payment Policy, Chapter 4. Washington, DC: Medicare Payment Advisory Commission.Google Scholar
MedPAC (2010), Aligning Incentives in Medicare, Washington, DC: MedPAC.Google Scholar
Mowatt, G., Bower, D. J., Brebner, J. A., Cairns, J. A., Grant, A. M. and McKee, L. (1997), ‘When and how to assess fast-changing technologies: a comparative study of medical applications of four generic technologies’, Health Technology Assessment, 1: 1–149.CrossRefGoogle ScholarPubMed
Office of Technology Assessment (OTA) (1983), Diagnosis Related Groups (DRGs) and the Medicare Program: Implications for Medical Technology. A Technical Memorandum, Washington, DC: Office of Technology Assessment.Google Scholar
Scheller-Kreinsen, D., Quentin, W. and Busse, R. (2011), ‘DRG-based hospital payment systems and technological innovation in 12 European countries’, Value in Health, 14(8): 1166–1172.Google Scholar
Schreyogg, J., Baumler, M. and Busse, R. (2009), ‘Balancing adoption and affordability of medical devices in Europe’, Health Policy, 92: 218–224.Google Scholar
Schreyogg, J., Stargardt, T., Tiemann, O. and Busse, R. (2006), ‘Methods to determine reimbursement rates for diagnosis related groups (DRGs): a comparison of nine European countries’, Health Care Management Science, 9: 215–223.CrossRefGoogle ScholarPubMed
Sorenson, C., Tarricone, R., Siebert, M. and Drummond, M. (2011), ‘Applying health economics for policy decision making: how much do devices differ from drugs?’, Europace, 13(2): 1154–1158.Google Scholar
Torbica, A. and Cappellaro, G. (2010), ‘Uptake and diffusion of medical technology innovation in Europe: What role for funding and procurement policies?’, Journal of Medical Marketing, 10(1): 61–69.Google Scholar
Weisbrod, B. A. (1991), ‘The health care quadrilemma: an essay on technological change, insurance, quality of care and cost containment’, Journal of Economic Literature, 29: 523–532.Google Scholar

Appendix 1: Articles included in the literature review

Audit Commission (2008), The right result? Payment by Results 2003–2007, London: Audit Commission.Google Scholar
Bellanger, M. and Tadif, L. (2006), ‘Accounting and reimbursement schemes for inpatient care in France’, Health Care Management Science, 9: 295–305.Google Scholar
Bocking, W., Ahrens, U., Kirch, W. and Milakovic, M. (2005), ‘First results of the introduction of DRGs in Germany and overview of experience form other DRG countries’, Journal of Public Health, 13(3): 128–137.Google Scholar
Boyle, S. (2007), ‘Payment by results in England’, Eurohealth, 13(1): 12–16.Google Scholar
Busse, R., Geissler, A., Quentin, W. and Wiley, M. (2011), Diagnosis-Related Groups in Europe: Moving Towards Transparency, Efficiency, and Quality in Hospitals, New York: McGraw-Hill/Open University Press.Google Scholar
Busse, R., Schreyogg, J. and Smith, P. (2006), ‘Hospital case payment systems in Europe’, Health Care Management Science, 9(3): 211–213.Google Scholar
Cappellaro, G., Ghislandi, S. and Anessi-Pessina, E. (2011), ‘Diffusion of medical technology: The role of financing’, Health Policy, 100(1): 51–59.Google Scholar
Cappellaro, G., Fattore, G. and Torbica, A. (2009), ‘Funding health technologies in decentralized systems: A comparison between Italy and Spain’, Health Policy, 92(2–3): 313–321.CrossRefGoogle ScholarPubMed
Clyde, A. T., Bockstedt, L., Farkas, J. A. and Jackson, C. (2008), ‘Experience with Medicare’s new technology add-on payment program’, Health Affairs, 27: 1632–1641.Google Scholar
Cots, F., Chiarello, P., Salvador, X. and Castells, X. (2012), ‘Patient classification systems and hospital costs of care for knee replacement in 10 European countries’, Health Economics, 21(S2): 116–128.Google Scholar
Department of Health (2009), Payment by Results Guidance for 2009–2010, London: Department of Health.Google Scholar
Donaldson, C. and Magnussen, J. (1992), ‘DRGs: The road to hospital efficiency’, Health Policy, 21(1): 47–64.CrossRefGoogle ScholarPubMed
Ellis, R. P. and Vidal-Fernandez, M. (2007), ‘Activity-based payments and reforms of the English hospital payment system’, Health Economics, Policy and Law, 20(4): 435–444.CrossRefGoogle Scholar
Farrar, S., Yi, D., Sutton, M., Chalkley, M., Sussex, J. and Scott, A. (2009), ‘Has payment by results affected the way that English hospitals provide care? Difference-in-differences analysis’, BMJ, 339: b3047.CrossRefGoogle ScholarPubMed
Fulop, N., Allen, P., Clarke, A. and Black, N. (2003), ‘From health technology assessments to research on the organization and delivery of health care services: addressing the balance’, Health Policy, 63: 155–165.Google Scholar
Garrison, L. P. and Wilensky, G.R. (1986), ‘Cost containment and incentives for technology’, Health Affairs, 5(2): 46–58.Google Scholar
Geissler, A., Scheller-Kreinsen, D. and Quentin, W. (2012), ‘Do diagnosis-related groups appropriately explain variations in costs and length of stay of hip replacement? A comparative assessment of DRG systems across 10 European countries’, Health Economics, 21(S2): 103–115.Google Scholar
Goldfield, N. (2010), ‘The evolution of diagnosis-related groups (DRGs): from its beginning in case-mix and resource use theory, to its implementation for payment and now for its current utilization for quality within and outside the hospital’, Quality Management in Health Care, 19(1): 3–16.CrossRefGoogle ScholarPubMed
Greenhalgh, T., Roberts, G., MacFarlane, F., Bate, P. and Kyriakidou, O. (2004), ‘Diffusion of innovations in service organizations: systematic review and recommendations’, Milbank Quarterly, 82: 581–629.Google Scholar
Häkkinen, U., Chiarello, P., Cots, F., Peltola, M. and Rättö, H. (2012), ‘Patient classification and hospital costs of care for acute myocardial infarction in nine European countries’, Health Economics, 21(S2): 19–29.Google Scholar
Henschke, C., Baumler, M., Weid, S., Gaskins, W. and Busse, R. (2010), ‘Extrabudgetary (“NUB”) payments: a gateway for introducing new medical devices into the German inpatient reimbursement system?’, J Management Marketing Healthcare, 3: 119–133.Google Scholar
Hessel, F. (2005), ‘Reimbursement for high-priced innovative medical devices in a DRG-based hospital care system: The German situation’, Expert Review of Pharmacoeconomics and Outcomes Research, 5(4): 377–381.Google Scholar
Hindle, D. and Lenz, M. J. (2001), ‘Using Australian DRGs in Germany: A commentary’, Australian Health Review, 24(1): 136–147.Google Scholar
Jegers, M., Kesteloot, K., De Graeve, D. and Gilles, W. (2001), ‘A typology for provider payment systems in health care’, Health Policy, 60(3): 255–273.Google Scholar
Kesteloot, K. and Voet, N. (1998), ‘Incentives for cooperation in quality among hospitals – the impact of the reimbursement systems’, J Health Econ, 17: 701–728.Google Scholar
Leister, J. E. and Stausberg, J. (2005), ‘Comparison of cost accounting methods from DRG systems and their effect on health care quality’, Health Policy, 74(1): 46–55.Google Scholar
Lungen, M., Dredge, B., Rose, A., Roebuck, C., Plamper, E., Lauterbach, K. and T. W. Group (2004), ‘Using diagnosis-related groups: The situation in the United Kingdom National Health Service and in Germany’, The European Journal of Health Economics, 5(4): 287–289.CrossRefGoogle ScholarPubMed
Mannion, R., Marini, G. and Street, A. (2008), ‘Implementing payment by results in the English NHS: changing incentives and the role of information’, Journal of Health Organization and Management, 22(1): 79–88.Google Scholar
Medpac (2003), ‘Payment for new technologies in Medicare’s prospective payment system’, In Report to the Congress: Medicare Payment Policy, Chapter 4. Washington DC: Medicare Payment Advisory Commission.Google Scholar
Medpac (2001), ‘Accounting for new technology in hospital prospective payment systems’, In: Report to the Congress: Medicare Payment Policy, pg 33–45. Washington DC: Medicare Payment Advisory Commission.Google Scholar
Medpac (2010), Aligning Incentives in Medicare, Washington, DC: Medicare Payment Advisory Commission.Google Scholar
Miraldo, M., Goddard, M. and Smith, P. (2006), The Incentive Effects of Payment by Results. CHE Research Paper 19, London: Dr. Foster Intelligence.Google Scholar
Office of Technology Assessment (1983), Diagnosis Related Groups (DRGs) and the Medicare Program: Implication for Medical Technology – A Technical Memorandum. Washington, DC: US Congress, Office of Technology Assessment.Google Scholar
Oostenbrink, J. B. and Rutten, F. F. (2006), ‘Cost assessment and price setting of inpatient care in the Netherlands: The DBC case-mix system’, Health Care Management Science, 9(3): 1009–1029.Google Scholar
Or, Z. (2009), ‘Activity based payment in France’, Euro Observer, 11(4): 5–6.Google Scholar
Robert, G., Greenhalgh, T., MacFarlane, F. and Peacock, R. (2010), ‘Adopting and assimilating new non-pharmaceutical technology into health care: a systematic review’, J Health Serv Res Policy, 15: 243–250.Google Scholar
Roger, F. H. (2003), ‘Case mix use in 25 countries: A migration success but international comparison failure’, International Journal of Medical Informatics, 70(2–3): 215–219.Google Scholar
Scheller-Kreinsen, D., Geissler, A. and Busse, R. (2009), ‘The ABC of DRGs’, Euro Observer, 11(4): 1–5.Google Scholar
Scheller-Kreinsen, D., Quentin, W. and Busse, R. (2011), ‘DRG-based hospital payment systems and technological innovation in 12 European countries’, Value in Health, 14(8): 1166–1172.Google Scholar
Schmid, A. and Gotze, R. (2009), ‘Cross-national policy learning in health system reform: The case of Diagnosis Related Groups’, International Social Security Review, 62: 21–40.Google Scholar
Schreyogg, J., Baumler, M. and Busse, R. (2009), ‘Balancing adoption and affordability of medical devices in Europe’, Health Policy, 92: 218–224.Google Scholar
Schreyogg, J., Stargardt, T., Tiemann, O. and Busse, R. (2006), ‘Methods to determine reimbursement rates for diagnosis related groups (DRGs): a comparison of nine European countries’, Health Care Management Science, 9: 215–223.Google Scholar
Schreyogg, J., Tiemann, O. and Busse, R. (2006), ‘Cost accounting to determine prices: How well do prices reflect costs in the German DRG system?’, Health Care Management Science, 9: 269–279.Google Scholar
Schreyogg, J., Tiemann, O. and Busse, R. (2005), ‘The DRG reimbursement system in Germany’, Euro Observer, 7(4): 4–6.Google Scholar
Shin, C. and Berliner, E. (2008), ‘Diffusion of new technology and payment policies: coronary stents’, Health Affairs, 27: 1566–1576.Google Scholar
Smith, J. J., Maida, A. and Henderson, J. A. (2002), ‘Hospital outpatient prospective payment under Medicare: Understanding the system and its implications’, Radiology, 225: 13–19.Google Scholar
Sorenson, C. and Kanavos, P. (2008), Financing Medical Devices in France and the UK, Brussels: European Health Technology Institute for Socio-Economic Research.Google Scholar
Street, A., Kobel, C., Renaud, T. and Thuilliez, J. (2012), ‘How well do diagnosis-related groups explain variations in costs or length of stay among patients and across hospitals? Methods for analyzing routine patient data’, Health Economics, 21(S2): 6–18.Google Scholar
Street, A. and Maynard, A. (2007), ‘Activity based financing in England: the need for continual refinement of payment by results’, Health Economics, Policy and Law, 2(4): 419–427.Google Scholar
Street, A., Vitikainen, K., Bjorvatn, A. and Hvenegaard, A. (2007), ‘Introducing activity-based financing: a review of experience in Australia, Denmark, Norway and Sweden’, CHE Research Paper 20. York: University of York.Google Scholar
Sussex, J. and Farrar, S. (2009), ‘Activity-based funding for National Health Service hospitals in England: managers’ experience and expectations’, European Journal of Health Economics, 10(2): 197–206.Google Scholar
Torbica, A. and Cappellaro, G. (2010), ‘Uptake and diffusion of medical technology innovation in Europe: What role for funding and procurement policies?’, Journal of Medical Marketing, 10(1): 61–69.Google Scholar
Weisbrod, B. A. (1991), ‘The health care quadrilemma: an essay on technological change, insurance, quality of care and cost containment’, Journal of Economic Literature, 29: 523–532.Google Scholar