Technology Usage in Europe vs' North America

1
Technology Usage in Europe vs. North America

• The View of a Global Corporation Operating in
  Both Markets
• Jenifer Ehreth, PhD
• Medtronic Europe, Sàrl, Switzerland
• Washington, DC, December 3, 2004

2
What can the US and Europe learn from each other?

• Ideas for reform
• DRGs from US to Europe
• HTA from Europe to US
• Impact of funding mechanisms
• Anticipated and unanticipated effects
• Factors that effect success

3
Healthcare Funding Dynamics
Western Europe
Eastern Europe
USA
74 million 6.2
381 million 8.1
286 million 13.2
Population of GDP on Health
600B
600B
Public
Direct control
Indirect control
20B
Direct control
lt5B
lt200B
Private
?
?
900B
4
Key Conclusions

• Differences
• Resources
• Medical need
• Structure

• Similarities
• Scientific understanding
• Expectation that services
• meet clinical guidelines

5
Resource Differences

• GDP/capita
• Source OECD 2002

6
Health Care is a Luxury Good

• The demand for health care increases as wealth
  increases
• The wealthier a society is, the larger the
  proportion of its resources go to health care

7
Healthcare Spending vs. Pacemaker Use
of GDP on Health Services
US
Germany
France
Canada
Australia
Spain
Japan
Italy
UK
Implants/million
8
Medical Need Percent of Population over 65
Source OECD 2002
9
US vs. Europe Hip ReplacementsOlder technology,
elderly population
Country Number/1000 Inhabitants/Year United
Kingdom 0.91 Scandinavia 1.04 Benelux 1.52 Germany
1.73 France 1.64 Spain 0.61 Italy 0.99 Total for
the EU 1.26 US 1.04
10
Structure Response to European Challenges

• Governments want to control growth in costs
• Health care reforms
• Introduce mechanisms to limit growth

• Pressure for health care expenditure as
• GDP to grow
• Demographics
• Patient involvement expectations
• Developments in technology

• Major Reforms in Progress
• Health Technology
• Assessment
• DRGs

11
Structural Differences

• Healthcare budgets insufficient, rationed and
  capped
• Constraints on private insurance
• Labor force difficult to downsize
• Procurement systems cost not value
• Physicians/patients not actively involved
• Direct-to-patient communications restricted
• Minimal liability if new therapies not adopted

12
Health Technology Assessment (HTA)

• Government sponsored
• Key question
• Is the technology cost-effective?
• HTA process always takes additional time
• Real world data
• learning curve phenomenon
• Positive HTA does not guarantee any funding
• Negative HTA will preclude funding

13
Impact of HTA
? slowest adopters
? medium adopters
? quick adopters

• Key Finding of 13 October London Management Forum
  Meeting European countries with the most
  developed health technology assessment schemes
  are the slowest to adopt new technologies.
• 29 Oct 2004 Clinica 11305

14
Structural Change in Europe

• Europe is following the US lead DRG Diagnosis
  Related Groups
• One payment per patient admission
• Incentive for efficient allocation of hospital
  resources
• Wave of Reform in Europe
• Existing Italy, Scandinavia (4), Netherlands,
  Spain (regions)
• Implementing Germany, France, UK, Portugal
• Incorporate some elements of the US system, but
• Overriding goal appears to be cost savings
• No incentive to use efficiency producing
  technologies
• Difficult to launch DRG systems getting good
  data and adjusting payments for new technologies

15
Impact Diffusion of Technology

• MRI/million Capita

• Angiography/100K Population

Source OECD 2002
16
Diffusion of CRT Therapy in Europe
17
Learning

• Europe and North America share an understanding
  of what is good medicine
• The US spends more on new technology
• Europe has broader access to old and barriers to
  new technology
• If barriers to access are lifted, people choose
  to use more technology

18
Technology Usage in Europe vs. North America

• The View of a Global Corporation Operating in
  Both Markets
• Jenifer Ehreth, PhD
• Medtronic Europe, Sàrl, Switzerland
• Washington, DC, December 3, 2004

19
Efficiency Hospitals

• Length of Stay

• Staff/Bed

Source OECD 2002
20
Impact RD Spending as of Sales
New Europe
Old Europe