China s zero markup for essential medicines at primary level facilities

Similar documents
3 rd International Conference. Session Sectorial Policy - Health. Public Hospital Reforms in India, China and South East. Asia :

Progress in the rational use of medicines

Fixing the Public Hospital System in China

Public Disclosure Copy

Penn Specialty Pharmacy Program mypennpharmacy bringing the Pharmacy to Patients

Strategies to Improve the Use of Medicines Standard Treatment Guidelines

Innovation and Diagnosis Related Groups (DRGs)

ACHIEVING COORDINATED AND INTEGRATED CARE AMONG LTC SERVICES: THE ROLE OF CARE MANAGEMENT

SITUATION ANALYSIS OF HTA INTRODUCTION AT NATIONAL LEVEL. Instruction for respondents

Trends in hospital reforms and reflections for China

Sixth Pillar: Health

HiT summary. The former Yugoslav. Health Care Systems in Transition. Government and recent political history. Population. Average life expectancy

Geographic Adjustment Factors in Medicare

The influx of newly insured Californians through

Primary care P4P in Portugal

China Health Reform Program for Results

Mandatory Medicaid Services

ENGAGING IN FINANCIAL IMPROVEMENT FOR THE FUTURE

How the contract model becomes the main mode of purchasing: a combination of evidence and luck in Thailand

3/19/2013. Medicare Spending Per Beneficiary: The New Link Between Acute and Post Acute Providers

The Financial Performance of Rural Hospitals and Implications for Elimination of the Critical Access Hospital Program

Implementation Plan for the Recent Priorities of the Health Care System Reform ( )

Précis WORLD BANK OPERATIONS EVALUATION DEPARTMENT WINTER 1999 N U M B E R 1 7 6

Introduction of a national health insurance scheme

Taiwan s s Healthcare Industry. Taiwan Institute of Economic Research Dr. Julie C. L. SUN 16 January 2007

Executive Summary. xxii

DESIGNATED PRESCRIBING AUTHORITY FOR REGISTERED NURSES WORKING IN PRIMARY HEALTH AND SPECIALTY TEAMS

HEALTH CARE GAINS IN CHINA

ACO S SUCCESS AND IMPACTS ON FINANCE AND REVENUE CYCLE

Ambulatory Care Practice Trends and Opportunities in Pharmacy

Red Tape in General Practice a Review

Appendix. We used matched-pair cluster-randomization to assign the. twenty-eight towns to intervention and control. Each cluster,

Pharmaceutical Sector Country Profile Questionnaire SRI LANKA

American Health Lawyers Association Institute on Medicare and Medicaid Payment Issues. History of the Physician Fee Schedule

Taking Into Account Entire Supply Chain. Biopharmaceutical Companies

Issue Brief. Findings from HSC INSURED AMERICANS DRIVE SURGE IN EMERGENCY DEPARTMENT VISITS. Trends in Emergency Department Use

Accountable Care Organizations

Nursing Home Antimicrobial Stewardship Guide Implement, Monitor, & Sustain a Program

Joint Statement on Ambulance Reform

Working Paper Series

A Crash Course on the Taiwanese Health Care System

OECD Expert Meeting on Payment Systems

Effective Care Coordination

Submission #1. Short Description: Medicare Payment to HOPDs, Section 603 of BiBA 2015

RE: RIN 0938-AQ22, Final Rule, Section 3022 of the Affordable Care Act, Medicare Shared Savings Program: Accountable Care Organizations

Graduate Medical Education Payments. Mark Miller, PhD Executive Director February 20, 2015

Urgent Care Centers and Free-Standing Emergency Rooms: A Necessary Alternative under the ACA

The selection of essential medicines in China: progress and the way forward

National Multiple Sclerosis Society

Pharmaceutical Sector Country Profile Questionnaire BAHRAIN

Energy Subsidy Reform: Lessons and Implications for India

Findings Brief. NC Rural Health Research Program

Using Physician Payment to Improve Health System Performance

Increase Your Bottom Line by Eliminating Physician Driven Denials. Olakunle Olaniyan MD President Case Management Covenants

Impact of Enrolling in Health Insurance on Low-Income Children that Enrolled for a Medical Reason

The TTO Journey: How Much Of It Is Actually In Pharmacy?

CBI 14 th Annual Specialty Therapies: Site of Care Optimization and Data Driven Specialty

Causes and Features on the Reform of American Inter-government Transfer Payment*

JAMAICA S HEALTH SYSTEMS

Citizen s Engagement in Health Service Provision in Kenya

HEALTH SYSTEMS IN TRANSITION THE PHILIPPINES HEALTH SYSTEM REVIEW 2011 PHILIPPINE LIVING HITS 2013,2014

Turkey. Note: A Mental Health Action plan is prepared but has not been published yet.

Programmatic Management of MDR-TB in China: Progress, Plan and Challenge

Emergency Department Facility Coding and Billing

Testimony Robert E. O Connor, MD, MPH House Committee on Oversight and Government Reform June 22, 2007

2014 MASTER PROJECT LIST

Banner Health Friday, February 20, 2015

September 2, Dear Administrator Tavenner:

Saint Kitts and Nevis

Rural Health Clinics

The Opportunities and Challenges of Health Reform

Effectiveness of Health Coaching on Health Outcomes and Health Services Utilization and Costs

The Lebanese Healthcare Sector: In Urgent Need of Reforms

Geographic Variation in Medicare Spending. Yvonne Jonk, PhD

On The Path to a Cure: From Diagnosis to Chronic Disease Management. Brief to the Senate Committee on Social Affairs, Science and Technology

CREATING A PHYSICIAN-LED HEALTHCARE FUTURE Better Care for Patients, Lower Healthcare Spending, & Financially Viable Physician Practices & Hospitals

Oklahoma Health Care Authority. Behavioral Health Quality Assessment and Performance Improvement (QAPI) Study

Medicaid Update Special Edition Budget Highlights New York State Budget: Health Reform Highlights

Emerging Outpatient CDI Drivers and Technologies

Medicaid Prescribed Drug Program. Spending Control Initiatives

7 China s current health reform agenda

THE IMPACT OF BBA, BIPA and MEDICARE+CHOICE ON LTC (Why Medicare/Medicare Supplement is SHORT-TERM CARE)

WHERE CAN $700 BILLION IN WASTE BE CUT ANNUALLY FROM THE U.S. HEALTHCARE SYSTEM?

Continuing Certain Medicaid Options Will Increase Costs, But Benefit Recipients and the State

PHYSICIANS, DEFENSIVE MEDICINE AND ETHICS

The Accountable Care Organization Specific Objectives

Comparative study on health care system between Myanmar and China according to World health organization (WHO) s basic health blocks

PATIENT ATTRIBUTION WHITE PAPER

21 March NHS Providers ON THE DAY BRIEFING Page 1

Global Health Electives Curriculum Overview Internal Medicine Residency University of Colorado Health Sciences Center January 2007

When Medications Hurt: Preventing Adverse Drug Events. Plan for today.

Name: CQ3 DP1. What role do health care facilities and services play in achieving better health for all Australians?

PHYSIOTHERAPY PRESCRIBING BETTER HEALTH FOR AUSTRALIA

Minnesota Statewide Quality Reporting and Measurement System:

New Approaches to Tourism in LACSDN. Case Study of the Mexican Tourism Sector. Yewande Awe May 1, Thesis

PHCA Webinar January 30, Latsha Davis & McKenna, P.C. Kimber L. Latsha, Esq.

Health Service Delivery in China: A Critical Review

ACOs the Medicare Shared Savings Program And Other Healthcare Reform Payment Methods

Impact of Financial and Operational Interventions Funded by the Flex Program

Gantt Chart. Critical Path Method 9/23/2013. Some of the common tools that managers use to create operational plan

Transcription:

China s zero markup for essential medicines at primary level facilities Wen Chen Fudan University

Efficiency concern in the country`s health system Specific nature of the efficiency problem the mismatch between increasing demand for and inadequate supply of safe and effective health care and the escalating medical costs drug sales constituted a major proportion of health care providers' revenue How does/did the efficiency problem manifest itself? The proportion of medicine utilization relative to total health expenditure and GDP Growth of medicine expenditure per capital The share of medicine spending relative to healthcare service expenditure for hospital outpatient and inpatient care The proportion of utilizing antibiotics, infusion, injection in outpatient prescription

Share of Medicine Expenditure Relative to THE 60.00 50.00 40.00 30.00 20.00 10.00 0.00 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Medicine Expenditure/ THE (%)

Share of Medicine Expenditure relative to GDP 2.30 2.20 2.10 2.00 1.90 1.80 1.70 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Medicine Expenditure/ GDP (%)

Share of Medicine Expenditure relative to Healthcare Service Expenditure 80.00 70.00 60.00 50.00 40.00 30.00 20.00 10.00 0.00 1990 1995 2000 2001 2002 2003 2004 2005 2006 2007 2008 Medicine Expenses/ Medical Service Expenditure for Outpatient (%) Medicine Expenses/ Medical Service Expenditure for Intpatient (%)

Efficiency concern in the country`s health system Specific nature of the efficiency problem the mismatch between increasing demand for and inadequate supply of safe and effective health care and the escalating medical costs drug sales constituted a major proportion of health care providers' revenue How does/did the efficiency problem manifest itself? The proportion of medicine utilization relative to total health expenditure and GDP Growth of medicine expenditure per capital The share of medicine spending relative to healthcare service expenditure for hospital outpatient and inpatient care The proportion of utilizing antibiotics, infusion, injection in outpatient prescription Why was it perceived to be a problem? The inefficiency related to medicines resulted in poor quality of care and expenditure escalation from overuse of medicine, then leading to inequitable access

Prescribing Behavior in Different Types of Institutions Urban Area Rural Area Community Health Care Center Community Health Care Station Township Health Center Township Health Station Prescriptions Average Antibiotics Requiring Two Injections Infusions Number of Usage (%) or More Usage (%) Usage (%) Antibiotics Antibiotics (%) 45.3 0.6 13.5 41.8 32.8 56.6 0.8 19.9 46.0 38.9 60.8 0.8 15.7 42.3 29.8 65.9 0.9 20.8 48.2 28.1 Health Center 57.0 0.8 15.3 42.5 30.5 Total Health Station 63.6 0.9 20.6 47.4 30.8

Causes of the efficiency problem Main causes of the efficiency problem. Economic incentive for hospitals and physicians to rely on medicine utilization is the major cause of the inefficiency The distortion of medical services and medicines prices regulated by government and fee-for-service employed by health insurance schemes exacerbated the inefficiency The focus of the case study. Zero markup policy was used to de-link the financial relation between health provider and services delivery and introduce new compensation mechanisms for primary healthcare institutions

Consequences of the efficiency problem Magnitude and impacts of the efficiency problem on health policy objectives. The inefficiency related to medicines resulted in poor quality of care and expenditure escalation from overuse of medicine, then leading to inequitable access Distributional consequences e.g. which actors in the system actually benefited from the inefficiency etc. Loser: provider, patient, insurer Beneficiary: Pharmaceutical industry

Health system/financing reforms aimed at addressing the efficiency problem Description of the reform(s) aimed at addressing the efficiency problem. No markup between wholesale and retail price of essential medicines at primary healthcare institutions New compensation mechanism for primary healthcare institutions Definition of essential medicines list and requirement of purchasing and utilization of essential medicines at primary healthcare level

Health system/financing reforms aimed at addressing the efficiency problem How it was intended to address the problem. Current compensation system in primary healthcare institutions didn t promote the rational use of medicines, especially for the essential medicines Zero Markup policy eliminate the perverse economic incentives for prescription behaviors hence promote the rational use of medicines How it was actually implemented. Pilot and extension Adapting to local situation Decentralization at provincial level

Effects of the reform on the efficiency problem(s) Based on available information: Impact on cost, access and quality of essential medicines with evidences Accessibility to essential medicines Average expenditure per prescription for outpatient: statistically significant only for upper respiratory tract infection and gastritis in rural primary healthcare institutions Impact on prescribing behavior and health service utilization patterns with evidences Percentage of prescriptions requiring antibiotics, infusion and injection: a limited impact on rational use in some cases Primary health care utilization: significantly increased utilization Impact on overall health system efficiency: The NEMP, accompanied with several parallel policies, were working together to affect the entire health system comprehensively. Impact on expenditure levels: positive effect on reducing financial burden of patients

Medicines provision in primary healthcare facilities National Urban Rural Medicines provision 322(144) 332(165) 318(134) In which: National EMs 203(63%) 192(58%) 208(65%) Supplementary Ems 73(23%) 94(28%) 64(20%) including: TCM 24(33%) 33(35%) 20(31%) Western medicines 48(66%) 58(62%) 43(67%)

Policy implications and lessons learnt (if author wishes) Observed policy implications. Economic incentives for efficiency improvement Possible lessons learnt from this reform implementation experience. Tradeoff with other policy objectives