LSE academics have co-authored five research papers in the latest issue of Health Affairs, the leading US journal of health policy thought and research.
Four of the five papers were funded by research grants from the US-based Commonwealth Fund awarded to LSE Health and led by Dr Sarah Thomson and Professor Elias Mossialos.
The issue also highlights the international work of the European Observatory on Health Systems and Policies, of which the LSE is a founding partner.
Mark Stabile (University of Toronto and LSE), Sarah Thomson (LSE), Sara Allin (University of Toronto) , Seán Boyle (LSE), Reinhard Busse (Technical University of Berlin), Karine Chevreul (University Paris XII), Greg Marchildon (University of Regina), and Elias Mossialos (LSE)
Around the world, rising health care costs are claiming a larger share of national budgets. This article reviews strategies developed to contain costs in health systems in Canada, England, France, and Germany in 2000–10. We used a comprehensive analysis of health systems and reforms in each country, compiled by the European Observatory on Health Systems and Policies. These countries rely on a number of budget and price-setting mechanisms to contain health care costs. Our review revealed trends in all four countries toward more use of technology assessments and payment based on diagnosis-related groups and the value of products or services. These policies may result in a more efficient use of health care resources, but we argue that they need to be combined with volume and price controls—measures unlikely to be adopted in the United States—if they are also to meet cost containment goals.
Sarah Thomson (LSE), Laura Schang (LSE), and Michael E. Chernew (Harvard University)
This article reviews efforts in the United States and several other member countries of the Organization for Economic Cooperation and Development to encourage patients, through cost sharing, to use goods such as medications, services, and providers that offer better value than other options—an approach known as value-based cost sharing. Among the countries we reviewed, we found that value-based approaches were most commonly applied to drug cost sharing. A few countries, including the United States, employed financial incentives, such as lower copayments, to encourage use of preferred providers or preventive services. Evidence suggests that these efforts can increase patients’ use of high-value services—although they may also be associated with high administrative costs and could exacerbate health inequalities among various groups. With careful design, implementation, and evaluation, value-based cost sharing can be an important tool for aligning patient and provider incentives to pursue high-value care.
Panos Kanavos (LSE), Alessandra Ferrario (LSE), Sotiris Vandoros (LSE), and Gerard F. Anderson (Johns Hopkins University)
The United States spends considerably more per capita on prescription drugs than other countries in the Organization for Economic Cooperation and Development (OECD). Drawing on the Intercontinental Medical Statistics Midas database, we examined the variation in drug prices among selected OECD countries in 2005, 2007, and 2010 to determine which country paid the highest prices for brand name drugs, what factors led to variation in per capita drug spending, and what factors contributed to the rate of increase in drug spending. We found that depending on how prices were weighted for volume across the countries, brand-name prescription drug prices were 5–198 percent higher in the United States than in the other countries in all three study years. (A limitation is that many negotiated price discounts obtained in the United States may not be fully reflected in the results of this study.) A contributor to higher US per capita drug spending is faster uptake of new and more expensive prescription drugs in the United States relative to other countries. In contrast, the other OECD countries employed mechanisms such as health technology assessment and restrictions on patients’ eligibility for new prescription drugs, and they required strict evidence of the value of new drugs. Similarly, US health care decision makers could consider requiring pharmaceutical manufacturers to provide more evidence about the value of new drugs in relation to the cost and negotiating prices accordingly.
Corinna Sorenson (LSE), Michael Drummond (University of York and LSE), and Lawton R. Burns(The Wharton School, University of Pennsylvania)
Rising health care costs are an international concern, particularly in the United States, where spending on health care outpaces that of other industrialized countries. Consequently, there is growing desire in the United States and Europe to take a more value-based approach to health care, particularly with respect to the adoption and use of new health technology. This article examines medical device reimbursement and pricing policies in the United States and Europe, with a particular focus on value. Compared to the United States, Europe more formally and consistently considers value to determine which technologies to cover and at what price, especially for complex, costly devices. Both the United States and Europe have introduced policies to provide temporary coverage and reimbursement for promising technologies while additional evidence of value is generated. But additional actions are needed in both the United States and Europe to ensure wise value-based reimbursement and pricing policies for all devices, including the generation of better pre- and postmarket evidence and the development of new methods to evaluate value and link evidence of value to reimbursement.
Irene Papanicolas (LSE), Jonathan Cylus (LSE and European Observatory), and Peter C. Smith (Imperial College)
Measures of personal satisfaction with health systems play an increasingly important role in national and international performance assessments. Using data from the 2010 Commonwealth Fund International Health Policy Survey, we analyzed the determinants of personal perceptions of health system performance in eleven high-income countries. In most countries there was a clear relationship between overall satisfaction with the health system and perceptions of affordability and effectiveness of care, as well as ratings of one’s regular doctor. There is some evidence that waiting times for appointments and diagnosis were widely associated with discontent, although respondents’ perceptions of these factors explained relatively little of the observed variation in overall satisfaction across countries. We conclude that “satisfaction” appears to represent something different in each healthsystem, and that policy makers can nevertheless use this type of analysis to determine priorities for improvement in their own country. Our findings also indicate that some of the keys to improving overall satisfaction with a health system may lie outside that system’s direct control and are related to differences in expectations across countries and to other factors that influence perceptions, such as national political debates, reporting in the news media, and national cultures.
*The authors are immensely grateful to the Commonwealth Fund for making available the data on which the above article is based. The work of Jonathan Cylus is funded by the European Observatory on Health Systems and Policies.