Pharmaceutical Benefits and Innovative payment system in Taiwans NHI

1
Pharmaceutical Benefits and Innovative payment
system in Taiwans NHI

• Hongjen Chang, MD, MPH, MS
• 2005/05/09

2
Agenda

• Overview of the NHI
• Pharmaceutical Benefits
• New drug reimbursement
• Innovative payment mechanisms
• Conclusion

3
Characteristics of the Healthcare System

• Dominated by the private sector
• Closed-staff system for hospitals (Hospitalist)
• Patients are free to choose care providers
• No gate-keeper system
• High service volumes in outpatient department in
  most hospitals
• Hospitals accredited by DOH every 3 years

4
Integration of Social Health Insurance
1995, 92 1996, 96 2003, 99
NHI
1995
5
Flow of Healthcare System under the NHI
Copayment
The Insured
Providers
Medical Services
NHI Cards
Payments
Premiums
Medical Claims
BNHI
6
Characteristics of NHI

• Mandatory enrollment
• Government-run, Single-payer system
• Contribution shared by the employer, the employee
  and the government, based on payroll or flat fee
  (Farmers, self-employed ..)
• Comprehensive benefit package
• Fee-for-Services under the Global budget payment
  system
• Co-payment for ambulatory care, inpatient care,
  and drugs

7
Benefit Coverage

• Inpatient care
• Ambulatory care
• Laboratory tests
• Prescription drugs and certain OTC drugs
• Dental services
• Traditional Chinese medicine
• Day care for the mentally ill
• Home care
• Some preventive services
• Child health check-up, prenatal check-up, pap
  smear, adult health check-up

8
Exemptions of Copayment

• Catastrophic diseases
• Child delivery
• Preventive health services
• Medical services offered at the defined mountain
  areas or on offshore islands
• Low-income households
• Veterans
• Children under the age of 3

9
Medical Expenditures
Total Spending in 2003 NT 328 billion (US9.6
billion)
Inpatient Care
NT109 billion
207 Billion
33
Ambulatory Care
NT219 billion
10
Total Health Expenditures as of GDP
1983-2002
NHI
Total Health Expenditures
Out-of-pocket
Health Insurance
Government Sector
11

• "The average citizen pays 20 U.S. dollars per
  person, per month."
• "They can go to any doctor, any hospital they
  want. They pay, on the average, two U.S. dollars
  and a maximum of about 10 U.S. dollars each
  visit. And we don't have a waiting list."

• Hong-jen Chang,
• ABC World News Tonight,
• with Peter Jennings (Critical Conditions)
• October 25, 2003

12
High Satisfaction
(19982003)
Satisfied (DOH) Satisfied (BNHI)
Dissatisfied (DOH) Dissatisfied (BNHI)
1995.05 1995.09 1996.06 1998.01 1998.04
1998.11 1999.05 2000.03 2000.10 2001.06
2001.12 2002.05 2002.11 2003.07 2003.12
13
???? 1. OECD Health Data,20002002 2.
?????????????89??????? 3. International
Health Policy?Chart VIII-5 from Multinational
Comparisons of Health System Data,2000
14
US Dollars
???? 1. OECD Health Data,20002002 2.
?????????????89???????,???91?8?13???????????
3. International Health Policy?Chart VIII-1 from
Multinational Comparisons of Health System
Data,2000
15
US Dollar
???? 1. OECD Health Data,20002001 2.
?????????????89???????,???91?8?13???????????
3. International Health Policy?Chart VIII-9 from
Multinational Comparisons of Health System
Data,2000
16
No. of visit
???? 1. OECD Health Data,20002001 2.
?????????????89???????,???91?8?13???????????
3. International Health Policy?Chart VIII-9 from
Multinational Comparisons of Health System
Data,2000
17
US Dollar
Source 1. OECD Health Data, 20002001
2. ?????????????89???????,???91?8?13???????????
3. International Health Policy?Chart VIII-9
from Multinational Comparisons of Health System
Data,2000
18
Features of the Pharmaceutical Benefits

• Broad coverage, OTC included, and herbal
  medicines
• Brand-name based pharmaceutical reimbursement
• NHI formulary or the NHI list of reimbursable
  drugs has a list of more than 21,000 items.
  Among them some 13,000 items are active.
• The adoption of simplified claim procedures
• (Daily Flat Fee) for the primary care
  clinics
• Hospital sector represents 75 of the NHI
  pharmaceutical market

19
Pharmaceutical Market Concentration

• The top 27 brand products accounted for 19.3 of
  the pharmaceutical expenditure
• 60.9 of pharmaceutical expenditure were
  generated by 333 brand products (2.5).
• 1260 brand products (9.2) generated 86.4 of
  expenditure.
• 11.8 (1,909 items) accounted for 92.5 of the
  pharmaceutical expenditure.
• Remaining 11,798 (88.2) consumed only 7.5 of
  the total pharmaceutical expenditure

20
Pricing for new drugs and generics
Pricing application
New Generics
New drugs
Lowest price
Direct comparison
Line Extension Drugs
Breakthrough Drugs
International price
Me Too Drugs
Reference with similar drugs
21
Medical care and cost, NHI

• 1998 1999 2000 2001 2002 2003 2004
• Total cost 2,909 3,166 3,260 3,417 3,709 3,839
  4,382
• Growth 11.4 8.8 2.9 4.8 8.5 3.3 14.1
• Rx Cost 722 804 829 847 905 945 1,093
• Growth 12.9 11.3 3.1 2.2 6.9 4.3 15.7
• Rx 24.8 25.4 25.4 24.8 24.4 24.6 24.9

Unit 100 Million NTD
22
Pharmaceutical Expenses of NHI
Billion

90.5B
84.7B
80.4B
82.9B
72.2B
64.0B
Source NHI Data Bank 2003/09
23
Payments for New Drugs
Unit Millions, NTD
24
New Drug diffusion, peptic ulcers
2,500
2,000

(millions)
1,500
1,000
500
H2-Blocker
PPI
25
New Drug diffusion, anti-psychotics
(millions)

1st G
SDAs
26
Anti-depressants
millions

SSRI
TCA
SNRI Others
MAOI
27
Map of Taiwan
Taiwan's most prominent physiographic feature is
its 270-kilometer central mountain range, which
boasts more than 200 peaks with an elevation over
3,000 meters.
28
IDS for the Remote Areas
Contract out
Coordinate
BNHI
Execution Center
Management committee
Payment
Supervise
Management Integration
Hospitals in charge
Supporting services Referral and transportation
Supporting services Referral and transportation
Referral
Clinics
Local Hospitals
Insured
Medical services
Medical services
29
Remote area expenditure gap
Ratio of Average Medical Expenditure Per Capita
Remote /Non-remote Area (Adjusted by age)
30
Rare Diseases and Orphan Drugs

• The NHI covers 54 kind orphan drugs and 100 types
  of rare diseases
• Major rare diseases and therapy
• Gauchers Disease (Cerezyme)
• Mutiple Clerosis (Betaferon, Rebif, Copaxon)
• Urea Cycle Disorder (Buphenyl Tab)
• Expenditures in 2001 (28 drugs for 44 diseases)
• Annual orphan drug expenditure NT150 million
  (US4.2 million) NT34,000 per person
• Annual rare disease medical spending NT320
  million (US9.2 million) NT72,000 per person

31
Quality-Based Payment in Taiwan

• 5 major diseases- cervical cancer, breast cancer,
  diabetes, tuberculosis, and asthma.
• Started on October 01, 2001
• Provides extra financial rewards to providers in
  addition to the NHI fee schedule.
• .

32
Quality Key Features

• Structure Qualification of Physicians, and
  Hospitals
• Process
• Cervical Cancer volume, growth rate
• Others NHI guidelines
• Outcome
• TB Completions of treatment
• Breast cancer Survival rate
• Cervical cancer early detection of non-invasive

33
Preliminary Results Asthma
Table 1 Medical services utilization of asthma
participants in Taiwan, before and after the
Quality-Based Payment pilot program
34
Thank You!
Turtle Island, Eastern Taiwan
35
Two Major Projects of Antimicrobial Reduction in
Human Medicine

• Reduction in Upper Respiratory Infection (URI)
• - Evidence that URI is mostly viral.
• - Evidence that huge amounts prescribed.
• - Action BNHI proclaimed new rule on February
  1, 2001.
• Reduction in Antimicrobial Prophylaxis in Surgery
• - Evidence excess days of use and amount in
  Taiwan
• (McDonald et al., JFMA, 2001).
• - Action Shan-Chwen Chang , Chair of Committee
  of DOH

36
Macrolide Consumption and Erythromycin Resistance
in Gr. A Streptococci in Taiwan, 1999 2003
DDD/1000 population/Day
Erythromycin resistant
Data source consumption - BNHI database
Resistance ratesTSAR