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UK 'leader of medical treatment assessment' - move towards 'payment by results'

The UK could be the intellectual leader of assessing clinical and technology practice, it has been claimed. In an article for the Financial Times' Health supplement, Tsung-Mei Cheng noted governments, employers and households are struggling with rising costs of healthcare due to an increase in diseases, patient expectations and costs of medical technologies.

Although a significant proportion of the money invested is based on faith that treatments work, the UK's National Institute for Clinical Excellence (Nice) uses a more rigorous, scientific platform, she added.

The clinician faces a myriad of choices and prices in the treatments they prescribe.  Indeed the UK is the global leader in this emerging field through the National Institute of Clinical Excellence (NICE).  However, the problem with NICE, and the reason that it is so controversial, is that it uses the financial measure of a QALY (quality life adjusted year) at a demographic level to decide whether a drug or treatment should be reimbursable or not. 

The value of a quality year of life is put at a notional £30,000.  The healthcare provider still has to take the risk that they could be paying £30,000 for a treatment which might not work.   NICE also assumes 100% patient compliance in its assessments, whilst we know that in practice patient compliance in the UK (and many other countries) is appalling and studies have shown that up to 65% of drugs prescribed are wasted in one way or another.

A better, and less divisive solution is for the healthcare company to take the risk and "put their money where their mouth is". The healthcare company is then reimbursed for its drug or device only if the patient reaches a pre-agreed clinical endpoint.  Simply put, if the patient does not get better the company does not get reimbursed. 

There is precedent where this model was adopted for the drug Velcade, a treatment for myeloma (bone cancer). NICE says: "The manufacturer rebates the full cost of Bortezomib for people who, after a maximum of four cycles of treatment, have less than a partial response."  Using this model transfers the risk from the primary healthcare provider back to the manufacturer. This would also ensure that the manufacturers are incentivised/forced to engage in the compliance problem rather than profiting from it."

To discuss strategies for success in the changing healthcare industry, please contact us now.

Mark Humphries
Product development and manufacturing
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