Faculty of Medicine Health Economics and Policies - PowerPoint Presentation

Slide1

Faculty of Medicine Health Economics and Policies (31505391) Health Markets and Regulation and Economic regulation of health markets Hospitals and pharmaceutical industry

By Hatim JaberMD MPH JBCM PhD16 + 18 - 04 - 2018

1Slide2

Course Content 31505391 Post MidtermWeek 9 Measurement and evaluation in health care. Goods, Market Failures, and Cost-Benefit Analysis.Week 10 Economic evaluation . Economics and efficiency cost analysis and cost effectiveness.

4-4 11:00 am GUEST LECTURE Week 11 Economic effects of Bad habits including smoking and alcohol consumption9-4 8:00 am GUEST LECTURE Week 12 Quality Improvements in healthcare delivery Methods to improve health care delivery.Week 13

Human resources in Healthcare delivery.19-4 10:00 am GUEST LECTURE

Week 14

Health Markets and Regulation and Economic regulation of health markets.

Week 15

-16 Final assessment (Exams.) 13-5-2018

2Slide3

Week 12Hospital Classification Do hospitals compete with one another on price or quality or reputation? Should there be increased competition across hospitals and provider types? Principles of Value-Based CompetitionPrice Differentials Between Brand Names and Generic DrugsRegulation by the Food and Drug AdministrationPharmaceutical drug pricing.How the government intervenes to promote the safety of the population.Health of the market for prescription drugs.

3Slide4

Presentation outline16 +18 - 4- 20184TimeHealth Care as an Enterprise

08:00 to 08:20Hospital Classification

08:20 to 08:30

Principles of Value-Based Competition

08:30

to 08:40

Regulations

:Economic and social regulation

08:40 to 08:50

Next

السياس

ا

ت

والتشريعات الدوائيةSlide5

7 Principal Health SystemsPrimary health service delivery systemHealth workforceLeadership and governance to assure qualityHealth systems financingSupplying medical products and technologiesHealth systems informationHouseholdsSlide6

Health Care as an Enterprise“Health care … is a moral enterprise and a scientific enterprise, but not fundamentally a commercial one. We are not selling a product.

We don’t have a consumer who understands everything and makes rational choices – and I include myself here.”Health Affairs – Volume 20, Number 1 (January/February 2001)

Avedis

DonabedianSlide7

Health System Transformation: Current and FutureCurrent FutureVariable quality; expensive, wasteful

Consistently better quality; lower cost, more efficientPay for volume

Pay for quality

Pay for transactions

Care-based episodes

Quality assessment based on provider and setting (process)

Quality assessment based on

patient experience

(outcomes)Slide8

21st Century Health CarePatients play a larger role, including involvement in making decisions about the future of health careInnovative, adaptable and very scalable systems have the potential to become national solutions

Health IT makes it possible for doctors to know how patients are doing over time – and for patients to engage in new ways – and at their convenience!Medical model (Western medicine) assumes that illness and disease require treatment.Recently, some movement toward wellness model – the prevention of disease and maintenance of well-beingSlide9

The Paradox of Health CareThe private system with intense competition But• Costs are high and rising• Services are restricted and often fall well short of recommended care• In other services, there is overuse of care• Standards of care often lag and fail to follow accepted benchmarks

• Diagnosis errors are common• Preventable treatment errors are common• Huge quality and cost differences persist across providers• Huge quality and cost differences persist across geographic areas• Best practices are slow to spread

• Innovation is resistedSlide10

Healthcare TriangleCost

QualityAccessSlide11

Market-driven health careThe most successful health systems pay attention to:I. Political space. There is the political space for those providing an inadequate or unnecessary service to exit the market; and for those that can provide a better one to enter it. ii. Information. There is adequate information about activity, cost and quality of care to make investment decisions. iii.

Motivated purchasers free to buy selectively. Purchasers have the analytic capacity and freedom to contract with alternative providers in instances of poor service. iv. Providers capable of responding to market forces. Providers are able to invest to improve services and be paid more, or be rewarded with more custom, if patients think they are doing a better job than others. v. Regulatory framework. Regulation ensures that: universal coverage is protected and assured; minimum standards of quality and finance are met; and competition policy is enforced. vi.

Capital markets. Providers and insurers/commissioners are able to retain savings and generate capital in order to finance expansion. vii.

Common language and currency. There is a common unit in which services are paid for, commissioned and ‘sold’. viii.

Local wage determination

. There is competition not only for custom, but also for staff, enabling providers to send a powerful signal that wages depend on success.

ix. Culture. Staff consider quality and ‘customer service’ to be the name of the game; and are operating in an environment where pluralism and freedom of action is valued. Markets do not work so well, if at all, when immediate priorities are elsewhere. Slide12

Healthcare Marketplace

Physicians

Hospitals

Insurance

Medical Device

Pharma-ceuticals

Long-term care

IT

Government

Consumers

EmployersSlide13

StakeholdersConsumersProvidersHospitalsPhysicians and ClinicsLong-term care facilities (e.g., nursing homes)

Pharmaceuticals, Medical Device, Biotechnology firmsInsurersEmployersGovernmentSlide14

HOSPITALSCan be public or privatePrivate hospitals can be for profit or non-profitMany different types and classificationsGeneral hospitals treat a wide variety of illnesses and agesJoint Commission on the Accreditation of Healthcare Organizations (JCAHO) – helps hospitals maintain quality of care, establishes guidelines for the operation of hospitals, conducts inspections to ensure that standards are being met.Slide15

Specialty HospitalsSpecific conditions, age groups, or other ways of grouping patientsFor example:Cancer hospitalsPediatric hospitalsPsychiatric hospitalsRehabilitation centersSlide16

Ambulatory FacilitiesAlso called “outpatient services” – they often provide diagnostic and treatment services that were previously performed in hospitalsSurgical clinics (surgicenters) outpatient surgeryUrgent care centersOutpatient clinicsOptical centersGenetic counseling centers (fertility clinics)Slide17

Long Term Care FacilitiesMainly care for elderly patients (residents)May also care for individuals with disabilities or handicapsResidential care (nursing homes) – basic physical careExtended care (skilled nursing) facilities – provide skilled nursing care and rehabilitation servicesAssisted (independent) living facilities – provide basic services (meals, housekeeping, etc.) and basic medical care.Slide18

Home Health CareBecame more common in late 1980s – now an area of tremendous growthNurse or other skilled professional visits patient in his/her home to provide treatment/educationLess expensive than admission to hospital or long term care facilityStates require licensing of home health agencies to assure the quality of careSlide19

Medical and Dental OfficesVary from small (one doctor) to large complexes with multiple specialties and other healthcare professionalsSome treat a wide variety of illnesses and conditions, others specializeSlide20

Mental Health ServicesCounseling centersPsychiatric clinics and hospitals Chemical (drug and alcohol) abuse treatment centersPhysical abuse treatment centers, dealing with child abuse, spouse abuse and elderly abuseSlide21

GOVERNMENT AGENCIESCan be at local, state, national and international levelsServices are tax supported

Veterans Administration HospitalSlide22

Food and Drug Administration (FDA)Federal agency Responsible for regulating food and drug products sold to the publicwww.fda.govSlide23

World Health Organization (WHO)International agencySponsored by United NationsCompiles disease statistics, promotes healthy living, and investigates serious health problems throughout the worldwww.who.intSlide24

Occupational Safety and Health Administration (OSHA)Part of the U.S. Department of LaborEstablishes and enforces standards that protect workers from job-related injuries and illnesseswww.osha.govSlide25

Public Health System (Health Departments)Part of the MoH Department of Health and Human ServicesProvide services to states and local communitiesExamples of servicesImmunizationsEnvironmental health and sanitationCollection of health statistics and recordsHealth educationClinics for health care and preventionSlide26

Veterans AdministrationFederally supportedHospitals and other servicesCare for veterans who served in the armed forceswww.va.govSlide27

NON-PROFITSAlso called voluntary agenciesMost deal with specific diseases or groups of diseasesThey provide funding for research, promote education, and services for victims of disease.They also influence laws, create standards, and educate health professionalsSlide28

HospiceHospice movement began in England, rapidly growing in United StatesProvides palliative care (relieves but does not cure) to dying patients and their familiesInvolves healthcare professionals and volunteersEmphasis is to make patient’s last days as pain-free and meaningful as possibleSlide29

Value-Based Competition in Health CareCreating a Value-Based Health Care SystemUniversal insurance is not enoughThe core issue in health care is the value of health care deliveredSignificant improvement in value will require fundamental restructuring of health care delivery, not incremental improvementsCompetition must be harnessed as a powerful force to encourage restructuring of care and continuous improvement in valueCreating competition around value is the central challenge

in health care reformSlide30

Principles of Value-Based Competition1. The goal should be value for patients, not just lowering costs2. The best way to contain costs is to drive improvement in quality3. There must be unrestricted competition based on results4. Competition should center on medical conditions over the full cycle of care5. Value is driven by provider experience, scale, and learning at the medical condition level6. Competition should be regional and national, not just local

7. Results must be universally measured and reported8. Reimbursement should be aligned with value and reward innovation9. Information technology is an enabler of restructuring care delivery and measuring results, not a solution itselfSlide31

Moving to Value-Based CompetitionGovernmentMeasure and report health results Create IT standard data definitions and interoperability standards to enable the collection and exchange of medical information for every patient Enable the restructuring of health care delivery around the integrated care of medical conditions across the full care cycle Shift reimbursement to bundled prices for cycles of

care instead of payments for discrete treatments or services End provider price discrimination across patients Open up competition among providers and across geographySlide32

RegulationsGovernment can attempt to control price, quantity, or quality of health care products.Example: Price Ceilings in The Jordanian Health Care System.Consumers are fully insured by the government.The government fixes the price the physician receives for each visit.Slide33

Regulation?Government intervenes to restore efficiency and/or equity. “Public interest theory.”Slide34

The Health and Social Care Bill proposes to increase and extend Monitor’s responsibilities substantially, to include: price-setting tackling anti-competitive behaviorensuring continuity of essential services (in the event of financial failure).Slide35

Guiding principles for the regulation of public services, including health care:Maximize competitionTransfer risk to the private sector Appoint a strong pro-competition regulator Set out clearly the standards that must be met and how operators will be held accountable for them Be clear about how and by whom universal service obligations are to be met Ensure high-quality information for customers n have more consumers rather than fewer (that is, don’t have a few monopolistic health authority purchasers).

(Lansley 2005)Slide36

Types of Government InterventionProvide public goods.Correct for externalitiesImpose regulations.Enforce antitrust laws.Sponsor redistribution programs.Operate public enterprises.Fund medical research.Tax cigarettes, pollution.

FDASlide37

RegulationsBecause consumers are fully insured, they will demand the number of visits as if the price per visit = 0.Slide38

38ECONOMIC ANALYSIS OF REGULATIONTwo Types of Market RegulationEconomic regulation and social regulationEconomic regulation is the traditional form of regulation. It is usually industry-specific. The deregulation movement of the last two decades has been primarily focused on reducing economic regulation of markets.

Social regulation is a newer form of market regulation that grew up during the 20th century, mostly since the 1960’s. While economic regulation has been declining, social regulation has grown rapidly.Slide39

39Economic Regulation of MarketsRestrictions on entry, price, quantity, and market shareEconomic regulation limits entry into a market or sets prices, restricts quantities, and allocates market shares among sellers. While anti-trust policy is intended to open markets up to new competition, economic regulation limits competition.Examples of economic regulation that often limit competition includePublic franchises

Occupational licensingOther licensing requirementsECONOMIC ANALYSIS OF REGULATIONSlide40

40ECONOMIC ANALYSIS OF REGULATIONSocial Regulation of MarketsRegulations prescribing how products must be designed or how they must be producedfeatures in the product. Social regulation prescribes how products must be designed or how they must be produced or mandates the inclusion of specific Social regulation includes health and safety regulations, environmental regulation, and occupational safety regulations.Slide41

41REGULATION AND PUBLIC INTERESTRegulation: Principle and PracticeRegulation often benefits producers and regulators, not consumers

Regulation often promotes the special interests rather than the public interestMarkets and prices are often superior to regulationRegulation is often based on unscientific analysis, misinformation, and faulty dataIn

principle, regulation is supposed to improve consumer welfare. In practice, regulation negative

effects on consumer welfare.Slide42

42REGULATION AND PUBLIC INTERESTExample: Motorcycle Registrations and Fatalities in Helmet Law States and in Non-Helmet Law States

Non-Helmet Law States

Helmet-Law States

2.89

2.93

Fatalities per 1000 accidents

3.05

3.38

Fatalities per 10,000 registered motorcycles

2.60

1.30

Motorcycle registrations per 1000 population

Does the data support the proposition that motorcycle helmet laws reduce motorcycle accident fatalities?