WhatIf

Don Husereau, University of Ottawa

The policy option presented here was chosen to stimulate discussion, but is only one of several options examined by the author in the report "The Use of Health Technology Assessment to Inform the Value of Provider Fees: Current Challenges and Future Opportunities".

<

 

Summary

About the presenter

Don Husereau is adjunct professor at University of Ottawa, Faculty of Medicine and editorial advisor for Value in Health journal. He was formerly senior advisor for the Canadian Agency for Drugs and Technologies in Health (CADTH). While there, he developed and led an environmental scanning program, a rapid review service and their process for prioritizing technology assessment. He also led the completion of the CADTH Health Technology Assessment Guidelines for the Economic Evaluation of Health Technologies and chaired Canada’s Health Technology Analysis Exchange. He received his BSc in pharmacy (1993) and MSc (2000) from the University of Alberta.

Main concern/problem

Physician providers are most often paid through fee-for-service arrangements— reimbursed directly by publicly funded insurers based on costs associated with the service. Choices made by providers regarding what mix of services to provide can greatly influence spending on both physician services and the associated hospital and technology expenditures needed to support service delivery. Currently, new provider fees are largely based on the cost of delivering the service, and do not usually consider the cost-effectiveness and other aspects of service value. This means providers have no signal to perform high-value services compared to low-value services. Some provinces have turned to using HTA to inform fee-code development. However, new fee codes are developed in each health jurisdiction according to separate approaches with very little coordination. The lack of standardization creates inequities across providers and pressure on provincial health jurisdictions to pay for services without considering local health-system requirements or systematically considering value.

Proposed Option

The proposal is to develop a pan-Canadian approach to pricing provider services using health technology assessment (HTA) to establish the relative value of providing the new service and apply a price modifier to the provider fees. Thus, service fees would be modified upward for high-value services and downward for low-value services. If an HTA demonstrates that a service is of high value, a positive fee modifier would be set to incentivize increased use by providers. This pan-Canadian approach would build on an information-sharing network for new fees that already exists across provinces.

Benefits

Currently, there is inequity in fees for services across the country, which leads to unnecessary tension and volatile price movements. Establishing a pan-Canadian approach to pricing of provider services that is based on HTA can lead to more coordinated pricing strategies for new services because it will standardize methods for costing new services and consider other measures of relative value, including where a service is being provided. This approach will also provide an avenue for coordinated health technology management in Canada and incentivize best practices in use of health technologies because most new fees are linked to new technology. Unnecessary health expenditures can be avoided, as well as pressure on provincial health jurisdictions to fund services based on perceptions of inequity.

Experience/evidence of success

There is substantial empirical evidence that providers modify their practices in response to financial incentives. In Canada, HTA has been recently used in Nova Scotia and Ontario to inform the development of new provider fee codes. However, the outcome of this practice has not been formally evaluated.(1,2) The Australian and U.S. public health-insurance systems have announced their intentions to adopt approaches that consider relative value to inform the price of provider fees in the future. However, the impact of using HTA to inform the price of services on quality and quantity of care, budget and health system efficiency is largely unknown.

Challenges and limitations

It has been suggested that HTA, as currently performed, may not reflect or measure other important sources of societal value. Economic evaluations in HTA may not incorporate issues like equity, social justice, patient autonomy and fairness. Predicting the value of a good or service in the real world is difficult— the evidence base may be lacking or difficult to generalize to a population or unpredictable effects of technology adoption may occur. In Canada, provinces could use different codes to describe similar services, making translation of the relative value of fees across provinces difficult. Finally, coordination of Medical Associations may require new mechanisms to develop a pan-Canadian fee schedule process.

Considerations for Canada

Improved coordination of service fees can contribute to meeting larger strategic goals across health systems, including retaining specialists and coordination of services and technology management. Provinces and territories would benefit from a coordinated approach to evaluating and determining provider fee prices. This approach is feasible and desirable and can build on existing provincial processes, providing increased benefits for providers while potentially avoiding unnecessary costs by payers and reducing inequities across provinces.

Presentation

_________________

1. Levin L. Disinvestment Strategies Based on Evidence Guided Adoption and Obsolescence of Technologies: The Ontario Experience [Internet]. 2011 
2. Tweed A. An Evidence-Based Framework for Evaluating New Fee Requests in Nova Scotia —Successes and Challenges in the First Year [Internet]. 2010